COBRA Overview

COBRA and state continuation

COBRA Overview

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Federal COBRA rules require employers with 20 or more employees to offer continuation of coverage for group health plans upon a loss of coverage triggered by one of the following qualifying events:  


Voluntary or involuntary termination of employment other than by reason of gross misconduct 


Reduction of hours of the covered employee’s employment 


Divorce or legal separation of the covered employee from the employee’s spouse


Death of the covered employee 


A dependent child ceases to be a dependent under the generally applicable requirements of the plan


A covered employee becomes entitled to benefits under Medicare


An employer’s bankruptcy, but only with respect to health coverage for retirees and their families

COBRA coverage offered should be identical to what was in place when the qualifying event occurred, and all individuals covered as of the qualifying event generally has an individual right to elect COBRA. COBRA participants may be required to pay up to 102% of the premium cost. Because COBRA participants must be treated like other similarly situated active participants, they must be given open enrollment and HIPAA special enrollment rights just like other active employees.