Employers may extend benefits to terminated employees by having said employees pay the premium, or no premium. Commonly, employers do this when the termination results from layoffs or reasons beyond the terminated employee’s control. Other times, the extended coverage is due to a contractual agreement between employer and employee. The cost of coverage is up to the discretion of the employer, and can range from full premium to no cost.
Some companies that voluntarily extend coverage apply the period of extension to the max COBRA continuation period. For example, if an employer permits 3 months coverage at the employees cost (instead of COBRA premium of up to 102%) those three months are included as part of the COBRA period, therefore not altering the 18 or 36 month period. The SPD and Cobra notification should clearly indicate that any extension runs concurrently with COBRA and not in addition to.