Consolidated Omnibus Reconciliation Act of 1985
(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.
The Department of Labor recently released their inflation-adjusted penalties for ERISA, the Family Medical Leave Act, and the Genetic Information Nondiscrimination Act.
With healthcare premiums continuously increasing year over year, many employers are searching for options to help reduce their benefit costs.
The Employee Retirement Income Security Act (ERISA) oversees group benefit plans, and with the onset of the Affordable Care Act, the ERISA Summary Plan Description (SPD) requirements are in the spotlight.