Demystifying COBRA

By Mark Thompson


The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides employees and their families the ability to maintain health benefits for a limited amount of time if they have specific life events that would otherwise cause them to lose coverage.


Here are a few common questions and answers related to COBRA


Q) Does this apply to my business?

A) If you offer a group health plan and have 20 or more employees you are most likely subject to COBRA regulations. (Certain states have similar laws that may affect employers with fewer than 20 employes.)


Q) As an employer, do I still pay my portion of the health insurance if an employee elects COBRA coverage?

A) No. Employees electing COBRA may be required to pay the entire premium for coverage.


Q) Who is eligible for continuation coverage under COBRA

A) In order to elect COBRA your health plan must be covered by COBRA; there must have been a qualifying event; and you must be a covered beneficiary affected by that event.


Qualifying events for Employees include:

  • Termination of employment (For reasons other than gross misconduct)
  • Reduction in hours


For spouses and dependent children of covered employees:

  • Both reasons listed above
  • Employee becomes Medicare eligible
  • Divorce or legal separation from the employee
  • Death of the employee
  • Loss of dependent child status under the plan rules. (The ACA stipulates that plans must be available to adult children until age 26)


Q) What else should I know?

A) There are several notices that employers must furnish to employees relating to COBRA.  We strongly encourage all employers to engage an administration firm for COBRA compliance.


You can read more about COBRA regulations here. If you are subject and need help, let us know. We have some great partners that can take care of compliance for you.

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