I had a business of 14 employees until I sold it to an associate in January, 2011. He opted not to hire my 65 year old associate, who was covered, along with his non-employee wife, by my healthcare plan. We had information at the time that since he was eligible for Medicare, he was not eligible for Cobra coverage. His wife has researched this, and found "Mini Cobra". She is paying a lot for her coverage now, is mad at me, and making accusations of illegality. Have I made a mistake?

Was the sale a stock or asset sale?

Did the sales contract specify the health plan continuation details?

COBRA obligations may transfer with an Asset Company Sale

Read: COBRA if your company is sold

In a stock sale, there generally is not a qualifying event (i.e., a stock sale by itself does not cause a termination of employment)


Since you sold your practice, you are not responsible for the new owner's possible mistake IF you did not terminate the employee. According to federal COBRA, a qualifying event for a spouse occurs when the covered employee becomes entitled to Medicare. In other words, John would not be entitled to apply for COBRA since he qualifies for Medicare, but his wife is entitled to apply for COBRA if she does not qualify for Medicare. Each state is different regarding "mini COBRA". What State are you in?