A Basic Guide to COBRA

The Consolidated Omnibus Reconciliation Act (COBRA) The Consolidated Omnibus Reconciliation Act (COBRA), signed in 1986 by Ronald Reagan, gives former employees, retirees, spouses, former spouses and dependent children the right to temporary continuation of health coverage from their previous employer.
Group health plans for employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year are subject to COBRA. Both full and part-time employees are counted in determining whether a plan is subject to COBRA.

In general, an employee, the employee's spouse or an employee's dependent child are eligible for COBRA. In certain cases, a retired employee, the retired employee's spouse and the retired employee's dependent children may be qualified beneficiaries. In addition, any child born to or placed for adoption with a covered employee during the period of COBRA coverage may be qualified. Agents, independent contractors and directors who participate in the group health plan may also be qualified. All participants must been enrolled in the former company’s health plan prior to the qualifying event. 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

Qualifying events for spouses are:

Voluntary or involuntary termination of employment for reasons other than "gross misconduct"
Reduction in the hours of employment worked by the covered employee
Divorce or legal separation of the covered employee
Death of the covered employee

Qualifying events for dependent children are the same as for the spouse with one addition:

Loss of "dependent child" status under the plan rules

Benefits generally last for 18 months. Special rules for disabled individuals and certain family members may extend the maximum period of coverage to 36 months.

Former employers, spouses and/or children have 60 days to elect COBRA under the original COBRA regulations. Cobra premiums must be paid all the way back to the beginning of the election period. Please see below for changes from the stimulus package.

For more information, go to the Department of Labor Site FAQ page.


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"Cobra Stimulus Reform Petition" "American Recovery and Reinvestment Act" Copyright 2009 Troy Breiland