The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires continuation of group health coverage for certain employees and their dependents who would otherwise lose coverage under the plan.
COBRA applies to any employer who employs 20 or more employees on at least 50 percent of the business days in the preceding calendar year. Employees include full-time, part-time and seasonal employees, owners, officers, self-employed individuals, and partners in a partnership.
QUALIFIED BENEFICIARY | QUALIFYING EVENT | DURATION OF CONTINUATION COVERAGE* |
---|---|---|
Covered Employee | • Termination of Employment (except for gross misconduct) | 18 months |
• Reduction in Hours of Employment 18 months | 18 months | |
Covered Spouse of Employee | • Termination of Employee-Spouse’s Employment (except for gross misconduct) | 18 months |
• Reduction in Employee-Spouse’s Hours of Employment | 18 months | |
• Death of Employee-Spouse | 36 months | |
• Divorce or legal separation from Employee-Spouse | 36 months | |
• Employee-Spouse becomes entitled to Medicare | 36 months | |
Covered Dependent of Employee | • Termination of Employee-Parent’s Employment (except for gross misconduct) | 18 months |
• Reduction in Employee-Parent’s hours of employment | 18 months | |
• Death of Employee-Parent | 36 months | |
• Parent’s Divorce or Legal Separation | 36 months | |
• Employee-parent becomes entitled to Medicare | 36 months | |
• Cease Dependent Child Status under Plan | 36 months | |
* The continuation period may be extended up to 29 months if the qualified beneficiary is determined to be disabled by the Social Security Administration at any time prior to the 60th day following the qualifying event. In addition, the continuation period may be extended up to 36 months if a second qualifying event occurs during the initial continuation period. |
What Should An Employer Do?
COBRA NOTICE REQUIREMENTS | |||
---|---|---|---|
TYPE OF NOTICE | PROVIDED BY | TO WHOM | TIMEFRAME |
Initial General Notice of COBRA Rights | Plan | Covered Employee and Covered Spouse | Within 90 days of coverage under the plan |
Qualifying Event Notice:
• Termination or Reduction in hours of Employee • Death of Employee • Employee’s Medicare Entitlement | Employer | Plan Administrator | 30 Days of Event |
Election Form Notice | Plan Administrator | Qualified Beneficiaries | 14 days of receiving Employer Notification of Qualifying Event |
Notice of Ineligibility | Plan Administrator | Qualified Beneficiaries | 14 days of request |
Notice of Early COBRA Termination | Plan Administrator | Qualified Beneficiaries | As soon as possible |
Notice of Divorce or Legal Separation | Employee Qualified Beneficiary | Plan Administrator | Within 60 days from the latest of:
|
Notice of Loss of Dependent Child Status | Employee Qualified Beneficiary | Plan Administrator | Within 60 days from the latest of:
|
Notice of Second Qualifying Event | Employee Qualified Beneficiary | Plan Administrator | Within 60 days from the latest of:
|
Social Security Disability Determination | Employee Qualified Beneficiary | Plan Administrator | 1) Latest of:
2) Prior to the end of 18-month continuation period |
Revocation of Social Security Disability Determination | Employee Qualified Beneficiary | Plan Administrator | Within 30 days of receiving disability revocation letter |
Conversion Notice | Plan Administrator | COBRA Continuees | Within 180 days prior to expiration of COBRA |
For more information: http://www.dol.gov/dol/topic/health-plans/cobra.htm