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.
Traditionally, employees were required to complete the COBRA Continuation Coverage Election form within 60 days of a qualifying incident in order to qualify for COBRA coverage. However, the 2009 Stimulus Plan extended COBRA rights for qualifying employees.* (Continuing reading to learn more about these changes.)
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.
Potential COBRA beneficiaries include:
- Former employees
- Retirees
- Spouses of former employees or retirees
- Former spouses of former employees and retirees
- Former spouses of employees and retirees
- Dependent children
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 Coverage Election form so that the employee is aware of his or her options and can apply for the COBRA coverage.
Employers should also post the COBRA Continuation Coverage Rights poster in the workplace in a place that is accessible by all employees, such as an employee break room.
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