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What is COBRA Continuation Coverage?

COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1986) is a federal ruling that requires most group health plans to offer temporary continuation of health coverage that might otherwise be terminated.

COBRA requires that continuation coverage be accessible to covered employees, their spouses, former spouses and dependent children when group health coverage would otherwise be lost due to certain qualifying events.

Some Common COBRA Qualifying Events
  • Termination of the covered employee (for anything other than gross misconduct)
  • A reduction in hours for the covered employee
  • Death of the covered employee
  • Divorce or legal separation from the covered employee
  • The covered employee becoming entitled to Medicare
  • A loss of dependent status for a dependent child
Reasons Why Your Employees May want to Choose COBRA Coverage
  • No Coverage Lapse- COBRA coverage will ensure that you won't experience a lapse in coverage, which could be devastating in the event of a sudden illness or an accident.
  • Same Provider Network- COBRA will enable you to continue using the same network of providers as your previous employer, because your coverage remains the same.
Does COBRA Apply to You?

COBRA generally applies to all private-sector group health plans maintained by employers that have at least 20 employees on more than 50 percent of its typical business days in the previous calendar year. Both full- and part-time employees are counted to determine whether a plan is subject to COBRA. Each part-time employee counts as a fraction of a full-time employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full-time.