Consolidated Omnibus Reconciliation Act of 1985


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Federal COBRA is a law that applies to employers with 20 or more employees, giving employees the ability to continue health insurance coverage after leaving employment.    If an employer with 20 or more full time equivalent employees does not offer extended health care through COBRA administration, then they are subject to an excise tax.   A ‘qualifying event’ which can trigger benefits through COBRA can be due to:

(1)    The death of the covered employee;

(2)    An employee loses eligibility for coverage due to voluntary or involuntary termination or a reduction in hours as a result of resignation, discharge, layoff, strike or lockout, medical leave, or slowdown in business operations;

(3)    Divorce or legal separation that terminates the ex-spouse’s eligibility for benefits;

(4)    A dependent child reaching the age at which he or she is no longer covered; or

(5)    The employee enrolls in Medicare

COBRA also allows for coverage for up to 18 months in most cases.  If the individual is deemed disabled by the Social Security Administration, coverage may continue for up to 29 months.  In the case of divorce from the former employee, the former spouse’s coverage may continue for up to 36 months.  In the case of death of the former employee, the widow’s coverage may continue for up to 36 months. COBRA does not apply if employees lose their benefits coverage because the employer has terminated the plan altogether or if the employer has gone out of business.  COBRA does not require the employer to pay for the cost of providing continuation coverage.  Instead it allows the employees and their dependents to maintain coverage at their expense by paying the full cost of the premium the employer and the employee previously paid, plus up to a 2% administrative charge (50% for the latter 11 months under the disability extension). Cal-COBRA is a California law that is like Federal COBRA

  • Cal-COBRA applies to employers and group health plans that cover from 2 to 19 employees.  It lets you keep your plan for up to 36 months.
  • Cal-COBRA is also for people who use up their Federal COBRA.  When your 18 months of Federal COBRA ends, you can keep your health plan up to 18 more months under Cal-COBRA.

Once eligible for COBRA:

  • You should get a notice in the mail about your COBRA/Cal-COBRA rights.
  • You have 60 days after being notified to sign up, and then 45 days to pay your first premium.
  • If you do not get a notice in the mail, call your last employer or health plan right away.
  • If you miss the deadline, you may lose the chance to sign up for Federal COBRA/Cal-COBRA.

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