COBRA Insurance Requirements

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) created a Federal Law requiring most employers with more than 20 employees who offer group health care coverage to give their employees, spouse and their dependents the option to continue their health care coverage when a loss in coverage occurs. COBRA coverage is the same coverage the employee had when they were actively working for the employer. However, the employee is responsible for 100 percent of the premiums, plus possibly a two percent administration fee.

Qualified beneficiary

You, the employee, your spouse and any dependents who were covered on your health insurance plan the day before you lost health insurance coverage are considered a qualified beneficiary and eligible for COBRA coverage.

Qualifying event

Quitting your place of employment, being let go from your place of employment or having your hours reduced so you are no longer considered a full-time employee are all considered qualifying events. A qualifying event makes you, your spouse and your dependents eligible for COBRA coverage. Additional qualified events for your spouse and dependents include if you pass away, get divorced or have a child reach the maximum age eligible for coverage on your plan.

General notice

When a qualifying event occurs and you lose your insurance coverage, COBRA law requires your employer to notify you of the COBRA law and your potential eligibility for COBRA. The notice sent to advise you of this information is called the general notice. The general notice must be sent to you, your spouse and your dependents within 90 days of the date your coverage ends.

Qualifying event election notice

The qualifying event election notice informs you of your right to continue your health insurance under COBRA. The notice must be sent out within 44 days of your employer being made aware of the qualifying event.

Time frames

Within 60 days after the qualified event notice is mailed or after your coverage ends, whichever is later, you have 60 days to decide whether you want to elect COBRA coverage. If you elect coverage, you have another 45 days to pay all the retroactive premiums due. Going forward, you will then have a 30 day grace period to pay your monthly COBRA premiums.