NFIB

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COBRA requires continuation coverage to be offered to covered employees, their spouses, their former spouses, and their dependent children when group health coverage would otherwise be lost due to certain specific events. Those events include any voluntary or involuntary employment changes and personal emergency events such as death or divorce.

Application

Employers may require individuals who elect continuation coverage to pay the full cost of the coverage, plus a 2 percent administrative charge. The COBRA payment is ordinarily less expensive, though, than individual health coverage but it is available for a limited period.

COBRA generally applies to all group health plans maintained by private-sector employers (with at least 20 employees) or by state and local governments (it does not cover federal programs).

Medical Care covered under COBRA

• Inpatient and outpatient hospital care
• Physician care
• Surgery and other major medical benefits
• Prescription drugs
• Dental and vision care

Requirements to qualify for COBRA continuation coverage

• The original group health plan must be covered by COBRA
• A qualifying event must occur
• Person must be a qualified beneficiary for that event

Notification

Employers or plan administrators must provide general notice describing COBRA to all employees, covered spouses, and dependents that join their group health plans within the first 90 days of coverage.  If you become entitled to elect COBRA continuation coverage, you must be given an election period of at least 60 days (starting on the later of the date you are furnished the election notice or the date you would lose coverage) to choose whether or not to elect continuation coverage.

Punishment for violating COBRA

When the employer fails to notify an employee of her or his rights under COBRA, the penalty ranges from $100 to $200 a day for each day the employee is not covered and other damages.