|
|
|
|
|
|
 Login
Home
COBRA
Health Reimbursement Accounts (HRA)
Health Savings Accounts (HSA)
FlexPlan (FSA)
Transportation
FSA/HRA Login
COBRA Login
Contact Us


Employer Services
COBRA FAQ's

  1. What does COBRA stand for?
  2. Why should I be concerned if my company is COBRA compliant?
  3. What is an Initial Notification Letter?
  4. What benefits need to be offered under COBRA?
  5. Who is entitled to benefits under COBRA?
  6. How does a person become eligible for COBRA continuation coverage?
  7. What group health plans are subject to COBRA?
  8. What process must individuals follow to elect COBRA continuation coverage?

1. What does COBRA stand for?
COBRA was put into place in 1986 by the Consolidated Omnibus Budget Reconciliation Act . The COBRA regulations are enforced by the Department of Labor and have been updated/expanded upon approximately 17 times since their inception.

Back to question list

2. Why should I be concerned if my company is COBRA compliant?
The Department of Labor enforces COBRA regulations. If an employer is found to be out of compliance, penalties can be imposed. These penalties can be as much as $110 per day that the employer is found to be in violation.

Back to question list

3. What is an Initial Notification Letter?
Each employer who is required to follow COBRA regulations is required to provide each employee with this notice upon enrollment into the employer sponsored health plan. The primary purpose of this required notice is to communicate to the employee their COBRA rights, should they experience a COBRA qualifying event.

Back to question list

4. What benefits need to be offered under COBRA?
Any qualified group sponsored benefit plan must be offered under COBRA. This includes, Medical, Dental, Health Reimbursement accounts (HRA), Vision, and Flexible Spending Accounts (FSA).

Back to question list

5 . Who is entitled to benefits under COBRA?
There are three elements to qualifying for COBRA benefits. COBRA establishes specific criteria for plans, qualified beneficiaries, and qualifying events:

Plan Coverage - Group health plans for employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year are subject to COBRA. Both full and part-time employees are counted to determine whether a plan is subject to COBRA. Each part-time employee counts as a fraction of an employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full time.

Qualified Beneficiaries - A qualified beneficiary generally is an individual covered by a group health plan on the day before a qualifying event who is either an employee, the employee's spouse, or an employee's dependent child. In certain cases, a retired employee, the retired employee's spouse, and the retired employee's dependent children may be qualified beneficiaries. In addition, any child born to or placed for adoption with a covered employee during the period of COBRA coverage is considered a qualified beneficiary. Agents, independent contractors, and directors who participate in the group health plan may also be qualified beneficiaries.

Qualifying Events - Qualifying events are certain events that would cause an individual to lose health coverage. The type of qualifying event will determine who the qualified beneficiaries are and the amount of time that a plan must offer the health coverage to them under COBRA. A plan, at its discretion, may provide longer periods of
continuation coverage.

Qualifying Events for Employees:

  • Voluntary or involuntary termination of employment for reasons other than
    gross misconduct
  • Reduction in the number of hours of employment
  • Qualifying Events for Spouses:
  • Voluntary or involuntary termination of the covered employee's employment for any reason other than gross misconduct
  • Reduction in the hours worked by the covered employee
  • Covered employee's becoming entitled to Medicare
  • Divorce or legal separation of the covered employee
  • Death of the covered employee
  • Qualifying Events for Dependent Children:
  • Loss of dependent child status under the plan rules
  • Voluntary or involuntary termination of the covered employee's employment for any reason other than gross misconduct
  • Reduction in the hours worked by the covered employee
  • Covered employee's becoming entitled to Medicare
  • Divorce or legal separation of the covered employee
  • Death of the covered employee

Back to question list

6. How does a person become eligible for COBRA
continuation coverage?
To be eligible for COBRA coverage, you must have been enrolled in your employer's health plan when you worked and the health plan must continue to be in effect for active employees. COBRA continuation coverage is available upon the occurrence of a qualifying event that would, except for the COBRA continuation coverage, cause an individual to lose his or her health care coverage.

Back to question list

7. What group health plans are subject to COBRA?
The law generally covers health plans maintained by private-sector employers with 20 or more employees, employee organizations, or state or local governments.

Back to question list

8. What process must individuals follow to elect COBRA continuation coverage?
Employers must notify plan administrators of a qualifying event within 30 days after an employee's death, termination, reduced hours of employment or entitlement to Medicare.

A qualified beneficiary must notify the plan administrator of a qualifying event within 60 days after divorce or legal separation or a child's ceasing to be covered as a dependent under plan rules.

Plan participants and beneficiaries generally must be sent an election notice not later than 14 days after the plan administrator receives notice that a qualifying event has occurred. The individual then has 60 days to decide whether to elect COBRA continuation coverage. The person has 45 days after electing coverage to pay the initial premium.

Back to question list