Liability and Risk

COBRA law is defined by lawsuits. It’s not uncommon for a lawsuit to cost thousands or even millions of dollars just for missing one of the many COBRA deadlines.

What is COBRA?

Congress passed the landmark Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provisions in 1986.  The law amends the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Service Act to provide continuation of group health coverage that otherwise might be terminated.

Who is subject to Cobra?

Employers who had an equivalent of at least twenty full-time and part-time employees on fifty percent of the business days in the previous calendar year.

Those employers must offer the continuation of group health benefits (Medical, Dental, Vision and Medical Reimbursement Account) to employees (and covered dependents) upon experiencing a “qualifying event.”

Employers are required to provide initial COBRA notification to covered employees and dependents, a letter detailing an individual’s rights upon experiencing a “qualifying event,” and an explanation of the conversion privilege.

Qualifying Events include:

• Termination of Employment
• Reduction of work hours
• Employee’s Death
• Employee’s divorce (or legal separation in some states)
• Medicare entitlement
• Change in “dependent” status