The 1986 Consolidated Omnibus Budget Reconciliation Act (COBRA) extends group health care coverage for employees and other beneficiaries that have involuntarily lost their employment or had a reduction in the number of hours that they work. COBRA allows qualifying individuals to continue to receive group health care coverage at a group rate for a limited period of time.

Who Qualifies for COBRA Continuation

Employees that have involuntarily lost their jobs or had a reduction in their hours may elect to be covered by COBRA. In order to be covered, employees need to complete the COBRA Continuation of Coverage form within 60 days of a qualifying event, such as a lay off.

 

How to Enroll in COBRA Continuation Coverage Plans

After an employee has qualified for COBRA coverage, the employer must notify the health care plan administrator within 30 days of the qualifying event.
Former employees and beneficiaries should be sent a plan election notice within 14 days of the date that the plan administrator receives notification of the qualifying event. The individual has up to 60 days to enroll in the COBRA plan. After enrolling in the COBRA plan, the individual has up to 45 days to pay the first premium.

Requirements for Employers

COBRA applies to state and local governments, employee organizations, and private-sector employers that have at least 20 employees.
When an employee has had a qualifying event, such as when an employee is laid off, the employer must notify the health care plan administrator within 30 days of the qualifying event. The employer should also provide the employee with the COBRA Notice to Continue Healthcare Coverage form so that the employee is aware of his or her options and can apply for the COBRA coverage.