The Consolidated Omnibus Budget Reconciliation Act (COBRA) was passed in 1986 to provide certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates.

Employer Responsibilities

Most employers with at least 20 employees who sponsor a group health plan are subject to the COBRA provisions. Governmental and church plans that are exempt from ERISA would also be exempt from COBRA. Employers subject to COBRA must comply with the following requirements:

• Initial COBRA Notice (also known as "General COBRA Notice"): Provides a general overview of the individual's rights under COBRA. The employer must distribute the Initial Notice to new plan participants (and spouses, if applicable) within 90 days of the coverage start date.

  Model Notice

• COBRA Election Notice: An employee and covered dependents who experience a qualifying event (see listing below) and a subsequent termination of coverage under the plan should receive a COBRA Election Notice, which explains their right to continue that coverage through COBRA. The Notice should include the coverage termination date, information on how to continue coverage, and payment information. An employer has 30 days to notify the plan administrator of the qualifying event. The plan administrator must then distribute the Election Notice to the covered employee, spouse, and dependents within 14 days of receiving the employer's notification. If the employer and plan administrator are the same, there is a combined 44 day timeline to distribute the Election Notice.

  Model Notice

• Notice of Early Termination of COBRA Coverage: Notifies a COBRA participant that their coverage will be terminating earlier than the COBRA maximum period. Employer must distribute "as soon as practicable."

This list is not inclusive of all employer responsibilities under COBRA. For additional information, please see the links below under "Additional Resources."

Qualifying Events and Maximum Length of Coverage

The following chart lists the qualifying events under COBRA. If an individual experiences one of the qualifying events followed by a loss of coverage, that individual would be entitled to the maximum period of coverage indicated.

FAQs

How does Medicare affect COBRA coverage?

If an individual is entitled to (i.e., enrolled in) Medicare before electing COBRA, the individual is eligible for the maximum period of coverage under COBRA. However, if the individual is entitled to Medicare after electing COBRA, the former employers' medical plan has the option to terminate the individual's COBRA coverage, if it is written in the plan's documents.

Medicare is the primary payer for an individual that is covered by both COBRA and Medicare, regardless of the size of the employer.

COBRA coverage does not extend an individual's Medicare Part B enrollment period. To avoid higher premium penalties under Medicare, an individual should enroll in Medicare Part B within 8 months of their employment termination (or active employee coverage termination, whichever is earlier). However, creditable prescription coverage under COBRA may extend an individual's enrollment period under Medicare Part D.

Is a disabled employee entitled to additional coverage under COBRA?

If the employee is determined by the Social Security Administration to be disabled during the first 60 days of COBRA coverage (this would include being disabled prior to COBRA coverage), then the employee and his/her covered dependents would be entitled to an additional 11 months of coverage under COBRA, for a maximum coverage period of 29 months.

Additional Resources

The Department of Labor (DOL) provides the following resources regarding COBRA:

• Common Questions and Answers
• Employer's Guide to COBRA
• Employee's Guide to COBRA
• State Continuation and/or Individual Conversion Plans – Many states have additional requirements regarding continued coverage and conversion options.