The Consolidated Omnibus Budget Reconciliation Act (COBRA) is an important healthcare law in the U.S. COBRA allows employees and their immediate dependents to participate in a group health insurance plan when the employee leaves their job or has a reduction of working hours.

What is COBRA Coverage?

Businesses that have at least twenty employees (or more) working full-time must offer group health insurance at a subsidized cost.  This health insurance must also extend to the employee’s immediate family. COBRA is the coverage that kicks in when an employee leaves their place of employment. It also steps in if the employee’s working hours fall below the eligibility requirement for full-time. The act allows for the employee to retain their coverage for up to eighteen months if they are willing to pay the unsubsidized costs.

Is Only the Employee Eligible?

No, COBRA covers the employee’s immediate family also. This includes spouses and dependent children. In some cases, it also covers former spouses and dependent step-children.

How To Qualify

To be eligible for COBRA, a person must work at a company where they were mandated under law to offer a group health insurance plan that is subsidized by the company. The person must have elected to participate in the group plan offered by the company.  Additionally, the plan (or a similar one) must have been in effect for more than fifty percent of the employer’s business days in the previous calendar year.

If all those criteria are met, then when an employee may be eligible for coverage

How Do Employees Qualify for Coverage?

There are two main ways for an employee to cover for COBRA coverage:

  1. If an employee leaves their place of employment, as long as it was not for gross misconduct, then they will qualify for coverage. COBRA will apply whether the employee was terminated or left voluntarily.
  2. If an employee has a decrease in working hours so that they are no longer consider full-time, then they will qualify for coverage.

How Do Spouses Qualify?

A spouse will automatically qualify for coverage when their partner, who is the employee, qualifies for COBRA.  Also, the spouse may qualify on their own for the following reasons:

  • The employee, while still employed, becomes eligible for Medicare, then the spouse can elect to receive COBRA.
  • If the spouse becomes legally separated or divorced from the employee, then they can elect to receive coverage.
  • If the employee dies, then the surviving spouse can elect to receive COBRA coverage.

How Do Dependent Children Qualify?

Dependent children qualify for COBRA in all the same instances as listed above for the spouse with the addition that they may elect to receive COBRA when they reach the age of majority and are no longer legally dependent on the employee.

In Conclusion

If you are an employer who offers a subsidized group health insurance and you are not sure if someone has properly qualified for COBRA coverage, contact the attorneys at Dowd Law and we will review each situation and advise you on your legal obligations.