COBRA
The Consolidated Omnibus Budget Reconciliation Act of 1985 enhanced job-based group health plans by requiring employers with 20 or more employees to offer continuation coverage to employees leaving the health plan for certain reasons.
COBRA must be offered to the employee and/or dependents of the employee which are covered on the plan at the time one of the following Qualifying Events occurs:
- Termination of employment (unless termination is for gross misconduct)
- Reduction in hours worked
- Death of Employee
- Employee qualifies for Medicare
- Divorce or legal separation
- Dependent child losing eligibility
If the employee or dependent lost coverage because employment was terminated, or the employee lost full-time status due to a reduction in hours worked, COBRA coverage will last for up to 18 months.
If the employee or dependent lost coverage due to any other Qualifying Event, COBRA coverage will last for up to 36 months.
Employees who elect COBRA coverage must pay up to 102% of the premium paid by the employer to the insurance company for their coverage.
On the next page, we’ll talk more about HIPAA.
