Cobra Administration
HOW DOES A PERSON BECOME ELIGIBLE FOR COBRA COVERAGE?To be eligible for COBRA coverage, you must have been enrolled in your employer's health plan when you worked and the health plan must continue to be in effect for active employees. COBRA continuation coverage is available upon the occurrence of a qualifying event that would cause an individual to lose his or her health care coverage.
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What group health plans are subject to COBRA?
COBRA is a health insurance coverage continuation law that generally covers health plans maintained by private-sector employers, employee organizations, or local or state governments with 20 or more employees.
What process must individuals follow to elect COBRA continuation coverage?
Employers must notify plan administrators of a qualifying event within 30 days after an employee's death, termination, reduced hours of employment or entitlement to Medicare.
A qualified beneficiary must notify the plan administrator of a qualifying event within 60 days after divorce, legal separation, or a child ceasing to be covered as a dependent under plan rules.
Plan participants and beneficiaries generally must be sent an election notice not later than 14 days after the plan administrator receives notice that a qualifying event has occurred. The individual then has 60 days to decide whether to elect COBRA continuation coverage. The person has 45 days after electing coverage to pay the initial premium.
When does COBRA coverage begin?
COBRA coverage begins on the date that health care coverage would otherwise have been lost by reason of a qualifying event.
What is the Federal Government's role in COBRA?
COBRA continuation coverage laws are administered by several agencies. The Departments of Labor and Treasury have jurisdiction over private-sector group health plans. The Department of Health and Human Services administers the continuation coverage law as it affects public-sector health plans.
The Internal Revenue Service, Department of the Treasury, has issued regulations on COBRA provisions relating to eligibility, coverage and premiums in 26 CFR Part 54, Continuation Coverage Requirements Applicable to Group Health Plans. Both the Departments of Labor and Treasury share jurisdiction for enforcement of these provisions.
