1. Who is covered?
Consolidated Omnibus Budget Reconciliation Act of 1985 covers 20 or more employees in an organization in at least 50% of typical business days in the preceding calendar year. It includes part-time and full-time employees. The controlled groups of COBRA include all companies within the group.
2. Mandatory COBRA notice
A general notice describing COBRA rights is required within first 90 days of coverage. A mandatory COBRA notice must include: Name of plan and contact person for more information, general description of continuation coverage provided under plan, procedures for notifying the plan of qualifying events or disabilities, keep plan administrator informed of addresses of the participants and beneficiaries; and state that general notice does not fully describe COBRA or the plan and complete information is available from the plan administrator and in the SPD.
3. Eligibility for COBRA
The qualified beneficiaries of COBRA are: employee, his/her spouse and dependent child born to an employee or placed for adoption with the employee during the period of COBRA coverage, retired employee, spouse and children. Others who are entitled to COBRA are agents, independent contractors, and directors who participate in the group health plan.
4. Qualifying events for employees under COBRA
The qualifying events for employees under COBRA are: voluntary or involuntary termination of employment for reasons other than severe misconduct, reduction in the hours of employment. The qualifying events for spouses under COBRA are: voluntary or involuntary termination of the covered employee's employment for any reason other than gross misconduct, reduction in the hours worked by the covered employee, covered employee becomes eligible for Medicare, legal separation or divorce from the covered employee, death of the covered employee. Qualifying events for dependent children under COBRA are: loss of dependent child status and termination of the covered employee's employment for any reason other than gross misconduct.
5. COBRA Election
Each qualified beneficiary may independently elect COBRA coverage. A covered employee or spouse may elect COBRA coverage on behalf of all other qualified beneficiaries. The parent or legal guardian may elect COBRA on behalf of any minor children who will continue coverage under the employer’s plan. Election notice must be provided in person or by first class mail within 14 days after the plan administrator receives notice that a qualifying event has occurred.