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COBRA
In 1986, Congress passed the Consolidated Omnibus Budget Reconciliation Act
(COBRA). COBRA was implemented to continue group health coverage requirements,
out of concern for individuals that lost their coverage when they lost their
job.
COBRA requires employers with 20 or more employees to allow individuals to
continue their group health coverage, based on certain qualifying events. Coverage
includes dental care, vision care, prescription drugs and any other health
related benefits offered by the plan. Coverage does not include non-health
related benefits such as group term life insurance, Accident death and dismemberment,
and weekly and long term disability benefits.
Part time employees are counted as a fraction. To determine fraction
divide the number of hours the employee worked by the number of hours the employee
would need to work to be considered full time. (Example: A part time employee
works 832 hours and full time is considered 2080 hours. Take 832 divided by
2080 to get 40%. The part time employee is 40% of a full time employee.)
Our Services:
 Plan Set Up and Employer Training
Receive Qualifying Event Information Electronically (New Hire & Terminations)
Qualified
Event Notices to all Qualified Beneficiaries, Including Dependants
Receive and Process Premium Payments from Active Members
Notification
to Participants of Termination of Benefits, Enrollment Changes, End of Eligibility,
Account Balance and Rate Changes
Tracking
and Notification of all Applicable Extensions
Send
Late Payment Notices
Plan Sponsor Reports
On-line Account Access for Plan sponsors
COBRA continuation must be offered to the Qualified Beneficiary (covered employee
and covered dependents), if coverage would otherwise be lost due to a qualifying
event.
What are considered qualifying events?
The qualifying events for employees are:
- Voluntary or involuntary termination of employment for reasons other than "gross
misconduct"
- Reduction in the number of hours of employment
The qualifying events for spouses are:
- 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
The qualifying events for dependent children are the same
as for the spouse with one addition:
- Loss of "dependent child" status under the plan rules.
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