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How to Administer COBRA

Author: Francis P. Morley

The Consolidated Omnibus Budget Reconciliation Act (COBRA) generally applies to group health plans maintained by employers that have at least 20 employees on more than 50 percent of its typical business days in the previous calendar year. Both full-time and part-time employees are counted to determine whether a plan is subject to COBRA.

COBRA requires group health plans to offer continuation coverage to covered employees and their families upon loss of coverage under a group health plan. COBRA also requires group health plans to provide covered employees and their families with specific notices explaining their rights under COBRA. Group health plans must also have rules for how COBRA continuation coverage is offered, how qualified beneficiaries may elect continuation coverage, and when continuation coverage can be terminated.

An employer may outsource COBRA administration; however, the employer is responsible for ensuring compliance with the law.