All About COBRA Coverage & Health Insurance Marketplace Options

COBRA Coverage

What is COBRA?

Consolidated Omnibus Budget Reconciliation Act of 1985, popularly known as COBRA, is basically a federal law that makes it mandatory for employers to offer extended health insurance coverage to employees after their retirement or termination of job or even reduction in working hours. To that effect, if you are an employer having 20 or more employees, it is important that you have some understanding of the basics of COBRA as well as the benefits which the government program proposes to offer. It may all begin with the employee eligibility process and besides, there may be COBRA like healthcare coverage sponsored by few states as well.

Who All Qualify for Employer Provided COBRA Benefits?

If you are an employer that already has a group health insurance plan in place then you are liable to provide COBRA benefits to qualified employees. These include:

  • Full-time and part-time employees that are nearing their retirement or job termination
  • Their spouses and dependents
  • All Medicare eligible retirees
  • Partners in partnerships
  • Washington D.C.

However, it is not mandatory for an employer to offer COBRA coverage if:

  • Employees are still not eligible for group healthcare insurance plan
  • Employees that have declined participating in group health insurance plan
  • Individual employee is already enrolled for Medicare health insurance benefits

What Healthcare Coverage Types Are Available Under COBRA?

Employee provided COBRA coverage includes health insurance plans, dental plans, vision plans, medical spending accounts, alcohol and substance abuse plans, prescription drug plans and mental health plans. But employer is not required to provide life or disability insurance, retirement plans or vacation plans to employees that already qualified for COBRA coverage.

In addition, there may be few qualifying events that may require employer to offer COBRA coverage. A typical COBRA coverage will remain in effect from 18 months to 36 months depending on the qualifying event and who exactly the beneficiary is. Employer is required to notify to employees regarding their rights under COBRA coverage. Furthermore, the employer has a time period of 30 days to notify plan administrator for any losses that may result for reasons listed in coverage.