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This is the “COBRA Continuation Coverage” section of the Employee Benefits FAQ Library.
COBRA (Consolidated Omnibus Budget Reconciliation Act) allows employees and their dependents to continue their group health insurance coverage for a limited time after certain qualifying events.
COBRA continuation coverage allows individuals to keep the same health plan they had through their employer, although they usually must pay the full premium themselves.
COBRA generally applies to employers that have 20 or more employees and offer group health insurance plans.
These employers must provide continuation coverage options to eligible employees and their dependents when coverage would otherwise end due to certain qualifying events.
COBRA coverage may be triggered by events that cause an employee or their dependents to lose health coverage.
Common qualifying events include:
These events may allow individuals to continue coverage temporarily.
The length of COBRA continuation coverage depends on the type of qualifying event.
Common coverage periods include:
In some cases, coverage periods may be extended if certain conditions apply.
Employees and dependents who elect COBRA continuation coverage typically pay the full cost of the health insurance premium, including the portion previously paid by the employer.
Employers may also charge up to 2% in administrative fees, meaning the total cost may be up to 102% of the premium.
A COBRA election notice is a written notice provided to employees or dependents informing them of their right to elect continuation coverage.
This notice includes important details such as:
Employers must provide this notice within specific timeframes after a qualifying event occurs.
Individuals who receive a COBRA election notice generally have 60 days to decide whether to elect continuation coverage.
The election period typically begins on the later of:
If COBRA is elected, coverage is typically applied retroactively to avoid gaps in coverage.
Yes. Many employers choose to outsource COBRA administration to third-party administrators (TPAs) that specialize in compliance and benefits administration.
Third-party administrators can assist with:
Outsourcing can help reduce administrative burden and minimize compliance risk.
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