The Consolidated Omnibus Reconciliation Act (COBRA) is a federal law that requires employers with 20 or more employees to offer continuing coverage to individuals who might otherwise lose their health benefits due to a qualifying event. Some states have similar laws for smaller groups. These qualifying events that could trigger COBRA are:
In the situations above, the employee and any covered dependents are entitled to 18 months of continued coverage through COBRA.
Additionally, the spouse and/or children of a qualified employee are entitled to 36 months of coverage as a result of:
Once a qualifying event occurs, the employer is required to send the employee a notice within 14 days informing them of their eligibility. Normally, the employee has 60 days to accept coverage which can carry a premium of 102% of the group premium (the extra 2% is an optional administrative fee the employer may include). The coverage under COBRA would be the same coverage the employee had on the group plan.
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