“COBRA“ stands for Consolidated Omnibus Budget Reconciliation Act of 1985.
COBRA is the Federal health care continuation law. COBRA requires that if an employee or other “qualified beneficiary” loses employer-provided health coverage due to termination of employment or another specified “triggering event,” the group health plan must offer continued health care coverage to the qualified beneficiary. The qualified beneficiary may be (and typically is) required to pay the full cost for the coverage.
COBRA coverage has limited duration. In most cases, the maximum COBRA period is 18 or 36 months from the date of the qualifying event.
COBRA effects groups of 20 OR MORE EMPLOYEES. Employee count includes all full and part time employees on the payroll. California employer groups who are not subject to Federal COBRA laws are covered under a State Law called Cal-COBRA, which has similar provisions.
For those firms who wish to self-administer [Federal] COBRA, we strongly recommend the use of specialized COBRA tracking software such as is produced by OnQue Technologies.
More often the COBRA function is best out-sourced to Professional Third-Party COBRA Administrators such as:
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or the self-insuring group’s medical claims TPA
Employers who are subject to Cal-COBRA must report a “qualifying event” to their cariier(s) within 30 days of the event date. The carrier(s) are then required to administer the remaining aspects of continuation coverage.
Employees who terminate with high cost medical conditions and are of limited income, may be eligible to have their COBRA premiums paid by the California Department of Health Services as an alternative to Medi-Cal enrollment. This is known as the Health Insurance Premium Payment program (HIPP).
IMPORTANT: All California employers are required to include the Notice to Terminating Employees form with their COBRA election notices.
