COBRA
What is COBRA?
COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) continuation coverage is a continuation of Plan coverage when coverage would otherwise end because of a life event known as a “Qualifying Event”. Continuation coverage is the same coverage that the Plan gives to other participants or beneficiaries under the Plan who are not receiving continuation coverage.
Who Does COBRA Apply To?
COBRA generally applies to all private-sector group health plans maintained by employers that have at least 20 employees on more than 50 percent of its typical business days in the previous calendar year. Both full-time and part-time employees are counted to determine whether a plan is subject to COBRA. Each part-time employee counts as a fraction of a full-time employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full-time.
What Employer Compliance is Required?
Under COBRA, employers must provide covered employees and their families with specific notices explaining their COBRA rights. They must also have rules for how COBRA continuation coverage is offered, how qualified beneficiaries may elect continuation coverage, and when it can be terminated.
