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COBRA continuation coverage
The Consolidated Omnibus Budget Reconciliation Act requires most group health plans to provide a temporary continuation of group health coverage that otherwise might be terminated. COBRA generally applies to all group health plans maintained by private-sector employees (with at least 20 employees) or by state and local governments. Exceptions: The law does not apply to plans sponsored by the federal government or by churches and certain church-related organizations.
COBRA requires continuation coverage to be offered to covered employees, their spouses, their former spouses and their dependent children when group health coverage would otherwise be lost due to certain specific events. Those events, often known as qualifying events, could include the death of a covered employee, termination or reduction in the hours of a covered employee’s employment for reasons other than gross misconduct, divorce or legal separation from a covered employee, a covered employee becoming entitled to Medicare and a child’s loss of dependent status (and coverage) under the plan.
Employers may require individuals who elect continuation coverage to pay the full cost of the coverage (with no employer contribution), plus a 2 percent administrative charge. However, the COBRA continuation coverage is usually less expensive than individual health coverage.
Under COBRA, a group health plan is any arrangement that an employer establishes or maintains to provide employees or their families with medical care, whether it is provided through insurance, by a health maintenance organization, out of the employer’s assets on a pay-as-you-go basis, or otherwise. “Medical care” for this purpose includes:
Inpatient and outpatient hospital care;
Physician care;
Surgery and other major medical benefits;
Prescription drugs; and
Dental and vision care.
Employer notices
Information on employer notices, can be obtained at:
www.pia.org/IRC/health/acaemployernoticeproactive9.17.13.pdf.
QuickSource documents
QS90016—An employee’s guide to health benefits under COBRA
Ask PIAs
900127-00—COBRA basics
Connecticut resources
QS060025—Termination of insurance
New York resources
310265-00—New York health insurance continuation
310276-00—Notice of group health plan termination
Common forms
COBRA model general notice
COBRA model election notice
New health insurance marketplace coverage options and your health coverage model notice (for employers who offer a health plan)
New health insurance marketplace coverage options and your health coverage model notice (for employers who do not offer a health plan)
Application for review of denial of COBRA premium reduction
Additional resources
Statute/regulations/news
U.S. Department of Labor health plans
U.S. Department of Labor COBRA continuation
COBRA poster
U.S. Department of Labor Technical Release 2013-02: Guidance on the Notice to Employees of Coverage Options under Fair Labor Standards Act Section 18B and Updated Model Election Notice under the Consolidated Omnibus Budget Reconciliation Act of 1985