Cobra: Healthcare Continuing Coverage Cheat Sheet by Davidpol
Continuing Healthcare Coverage after employment ends
usa healthcare continuation coverage cobra
Introduction: Continuation of Health Coverage
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.
What’s Guaranteed to Employees?
Continued health care coverage to employees, former employees and/or qualified beneficiaries after the loss of previous coverage as a result of certain qualifying events
Coverage continues at the same level provided before the qualifying event
Examples of Qualifying Events
Reduction of hours
Participant becomes disabled
Death or divorce
Dependant child loses dependant status
General notice describing COBRA rights must be provided to participants within 90 days after participation in health care plan begins
Employers generally must provide plan administrators with notice within 30 days of the occurrence of a qualifying event
Plan administrator must provide participants with an election notice of COBRA rights within 14 days of a qualifying event (44 days if the plan administrator is also the employer)
Time period allowed to Elect Coverage
60 days from the date of the qualifying event or the date the election notice is provided, whichever is later
Can Participant be required to pay full Premiums?
Yes, including any portion of the premium generally by the employer on behalf of active employees.
Length of Coverage
18 months in cases involving termination and/or a reduction in hours
29 months in certain cases involving disability
36 months in cases involving the death of a covered employee, or divorce
When can the Coverage be Cut Off?
A participant fails to pay required premiums
Employer discontinues health care plan
Under certain circumstances where participant obtains subsequent coverage
Top COBRA Tips
Ensure that all notices go out to employees and participants within the time required by the Act
Notify all participants about any changes in health benefits
What are the Penalties for failing to comply?
Monetary penalties for the Employer
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