Disability is not COBRA-qualifying event
Issue:

One of your employees has been on work-related disability for six months. You want to send him a COBRA letter because he is no longer working a full 40-hour week, making him ineligible for your medical coverage. He is not terminated, and may come back to work. Your payroll administrator's form provides an option that the qualifying event resulting in a loss of coverage eligibility is a “disability.” Can your letter state that the qualifying event is a disability?
Answer:    

No, disability is not, in itself, a COBRA-qualifying event. The only COBRA-qualifying events are termination of employment or reduction in hours resulting in the loss of the employee's health care coverage. In this instance, the employee would lose health coverage and be offered COBRA coverage due to a reduction in hours.

Initially, the employee can get up to 18 months of COBRA. The employee could be entitled to COBRA continuation for up to 29 months if he receives a Social Security disability determination within the initial 18-month COBRA coverage period; he provides a notice of that determination within 60 days of the determination and within the initial coverage period; and he is deemed by the Social Security Administration to have been disabled during the first 60 days of COBRA.

Source: CCH Employee Benefits Management Directions, Issue No. 423, July 1, 2008.
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