3:4 Consolidated Omnibus Budget Reconciliation Act (COBRA)

The Consolidated Omnibus Reconciliation Act (COBRA) requires employers with 20 or more employees to continue to offer coverage in their group health plan to certain former employees, retirees, spouses, and dependent children.

The length of continuation coverage offered depends on the "qualifying event." "Qualifying events" are certain types of events that would cause, except for COBRA continuation coverage, an individual to lose health coverage. The type of qualifying event will determine who is entitled for continuation coverage and the required amount of time that the plan must offer the health coverage under COBRA. For example, in the event a covered employee voluntarily or involuntarily terminates employment for reason other than "gross misconduct" or reduces the number of hours worked (with loss of coverage), the covered employee, spouse, and dependent children will be entitled to continue coverage in the group health plan for up to 18 months. A covered spouse and dependent child(ren) are eligible to continue coverage for up to 36 months in the event of divorce, legal separation, or death of the covered employee, or the child(ren) no longer meets the requirements of a dependent child under the health plan.

Individuals may be required to pay the entire group rate premium plus a surcharge of up to 2 percent to cover administrative costs.

Employees and their dependents must be notified of their right to extend health plan coverage at the time they become plan participants and anytime a qualifying event occurs.

The required period of continued coverage may be terminated by the employer if the individual fails to make the required payments, becomes enrolled in another health plan that does not contain any exclusion or limitation with respect to any pre-existing condition, becomes entitled to Medicare, or if the employer's group health plan is terminated.

Enforcement of COBRA rests with the Departments of Labor and Treasury. The Internal Revenue Service, which is in the Department of the Treasury, is responsible for publishing regulations on COBRA provisions relating to eligibility and premiums.

The above information is a summary only and is in no way intended to be legal advice. Furthermore, this should be read in concert with University policies and procedures. Requests for further information should be directed to the Office of Human Resources.