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COBRA Benefits and Info You Should Know
COBRA Benefits and Info You Should Know


As people move from work location to location health coverage usually is one of their major concerns today. There are a set of defined term and qualifiations to qualifiy if the emplorer must offer COBRA. *

  1. Qualified emplorer :  If the employer had 20 or more employees and offered a group health plans in the prior year COBRA must be offered.
  2. Employee count : Part-timers'  Part-time employee hours should be added together for determining full-time equivalents (40 hours) Add up each 40 hour equivalent individual or part-times for qualified employer.
  3. Qualified beneficiaries: Eligibility for COBRA is limited to qualified beneficiaries which are those covered by a group plan the day before a qualifing event.  These can enclude plan participants whether full-time or part-time, their spouses, dependents, and retirees not yet covered by Medicare.
  4. Qualifying events  for qualified beneficiiaries:  
    1. Employment termination voluntary or involuntary (exception gross misconduct)
    2. Reduced work schedule as from full-time to part-time
    3. Death
    4. Divorce
    5. Legal separation
    6. Medicare eligibility 
    7. Active military duty (if the employer does not maintain the reservist's health coverage)
  5. Coverage scope :
    1. Coverage must offere identical health care as was in polace before the qualifying event  to non-COBRA beneficiaries any chanages following the qualifying event will apply both to COBRA and non-COBRA employees.
  6. Coverage duration: 
    1. Most qualifying events will provide benefits for qualifed beneficiaries from the date of a qualifying event for up to 18 months.
    2. Exceptions may include an added qualifying event that could extend the covereage
    3. Employeers may also provide extended coverage.
    4. Coverage may end if the employer stop offering group health coverage
    5. Coverage may end if the beneficiary does not pay timely premiums.
  7. Beneficiary premiums:
    1. The full cost of the insurance premium though some companies do subsidize the COBRA premiums
    2. The former may change up to 102% of the planned premium for the insurance keeping the extra 2% to cover administrative costs.
    3. Prmemiums may increase if the plan offered has an increase
    4. Employers can terminate the COBRA coverage is payment are late.
    5. The Beneficiary must make the initial premium payment within 45 days after COBRA election
  8. Election and notification requirements:
    1. Employers must notifycovered employers and their spouses of their right under COBRA when they join the company's helath plan.
    2. Employers must inform the plan administrator within 30 days for these qualifying events for employee's death,termination, reduction in hours, or medicare entitlement.
    3. A qualified beneficiary must inform the plan administrator within 60 days of these qualifying events divorce, legal separation or a dependent's change of status.
    4. The plan administator must notify the person entitled to receive COBRA benefits within 2 weeks that they have 60 days whether to elect to accept or decline coverage. This is the point that usually causes the most grief for employers.  Sending the notices timely and to be sure all that need the notices receive them.
    5. Each beneficiary has the right to independently elect or reject COBRA whether the beneficiary is the employee or a dependent.

* Please note that this information is not designed to be all inclusive on this matter but given as a general over view of the Federal laws concern this. Since COBRA and other health continuation provisions can vary from state to state this information is give to alert you to the fact that you need to review your rights and privildges for the continuation of your health benefits before you have a change that could leave you without coverage.  Some states laws cover all employers even those with less then 20 employees which is different then the Federal laws affecting this subject.  To determine your state's laws refer to your state's labor agency or a legal professional.  Plan requirements, notification requirements, denifination of terms and length of coverages all may vary from state to state as well.  Please note that provisions can change from time to time as well.  The above information is current as was made known to us as of the date noted below.

Current as of 11/01/06

Last updated on Thu, 05/13/2004 - 13:57.
Site last updated 03/20/2022