Continued Healthcare Coverage
What is COBRA?
COBRA is a federal law which gives you the right to choose to temporarily continue health coverage under the group health insurance benefits that you would otherwise lose after you reduce your working hours, quit your job, or lose your job. It also allows family members to choose to keep health insurance after a job loss or other qualifying event that would normally cause them to lose coverage they have through your employer.
Who Qualifies for COBRA?
There are criteria that needs to be met for different employees and other individuals in order to be eligible for COBRA coverage. In addition to meeting these criteria, eligible employees can typically only receive COBRA coverage following specific qualifying events.
If an employer has 20 or more full-time-equivalent employees, they’re usually mandated to offer COBRA coverage. If there are part-time employees, their working hours can be clubbed together to create a full-time-equivalent employee, which decides the overall COBRA applicability for the employer.
A COBRA-eligible employee must be enrolled in a company-sponsored group health insurance plan on the day before the qualifying event occurs. The insurance plan must be effective on more than 50% of the employer’s typical business days in the previous calendar year. The employer must additionally continue to offer its existing employees a health plan for the departing employee to qualify for COBRA. In case of the employer going out of business or the employer no longer offering health insurance to existing employees, the departing employee may no longer be eligible for COBRA coverage.
The type of qualifying event varies, depending on who the COBRA coverage is for:
Employees qualify for COBRA coverage if:
- There is voluntary job loss — except in cases of certain misconduct
- The decrease in the number of hours of employment resulting in loss of employer insurance coverage
Spouses qualify for COBRA coverage if the above events are met or if:
- The covered employee becomes entitled to Medicare
- There is a divorce or legal separation from the covered employee
- The employee passes away
Dependent children qualify for COBRA coverage for generally the same events as the spouse, as well as:
- If there is a loss of dependent child status
Let Us Help You Simplify COBRA Processing
Preparing to offer COBRA for your staff is simple with Unicorn HRO. Our iCON platform offers automation and simplicity for you and your organization to access necessary information related to HR and benefits administration.
Learn how Unicorn HRO solutions help your organization today.