No. Under ERISA, Employers have an obligation to follow the terms of the plan, which would include terminating coverage in line with the plan’s terms. The plan documents will outline when coverage ends in the event of employment termination or another loss of eligibility. Coverage end dates will vary by plan and may include day of employment termination, end of pay period, or even end of the month in which employment or eligibility ends.
Employers should not end coverage early or allow employees to choose a coverage end date that does not align with the plan documents. Sometimes an employee will ask their employer to end coverage early if the coverage overlaps with other coverage, such as when that employee enrolls in another plan after starting a new job. Although the employer may view this as a helpful accommodation, allowing it would violate ERISA rules and therefore should not be permitted.
Another thing to consider is the fact that the employee should receive the coverage they pay for. Employees make premium contributions that apply to a specific coverage period. The employer must continue coverage for the period covered by the employee’s payment if doing so is consistent with the plan’s eligibility rules. In the event a premium contribution extends past the plan’s eligibility coverage period, the employer should refund the coverage back to the employee.