COBRA
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102% of the cost to the plan.

COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.

COBRA’s protections are offered to eligible individuals when certain qualifying events occur:

For employees:
● Voluntary or involuntary termination of employment for any reason except "gross misconduct".
● A change in employee's work status to part-time, resulting in the employee's ineligibility for the employer's health plan.

For spouses:
● Voluntary or involuntary termination of the covered employee's employment for any reason except "gross misconduct".
● A change in the covered employee's work status to part-time, resulting in ineligibility for the employer's health plan.
● The covered employee becomes entitled to Medicare.
● Divorce or legal separation from the covered employee.
● Death of the covered employee.

The qualifying events for dependent children are the same as for the spouse plus:
● Loss of dependent child status under the plan rules.

Employers are required to notify employees about their COBRA rights when they join the group health plan and, most importantly, when they are about to leave the plan because of one of the triggers listed above. Qualified beneficiaries have 60 days from the date the COBRA offer is made to notify the employer of their choice to elect or reject continued coverage. Each qualified beneficiary may elect COBRA coverage for him or herself-or a covered employee or spouse may chose COBRA for any other qualified beneficiaries.

COBRA coverage begins on the date the group health coverage would otherwise end and there is no gap. COBRA benefits last for a period of time that depends on who the qualified beneficiary is and what event triggered COBRA qualification. When the qualifying event is termination or reduction of work hours, the standard COBRA benefit period is a maximum of 18 months.

If a qualified beneficiary (including a spouse or dependent child as well as the employee) is considered disabled as determined by the Social Security Administration (SSA) within their first 60 days of COBRA coverage, he or she may extend the COBRA continuation period for an additional 11 months, to a total of 29 months. To be eligible for this disability extension, a copy of the SSA's disability determination must be provided to the plan administrator within 60 days of it’s receipt. Note, also that the premium will increase 50% more for months 19 to 29.

COBRA lasts for 36 months if the qualifying event is the death of, or divorce/legal separation from the covered employee.