Employer's COBRA Responsibilities

COBRA is an acronym for the Consolidated Omnibus Budget Reconciliation Act. This is the act through which health benefit guarantees were passed in 1986. The act allows some former employees, retirees, former spouses of employees and dependent children of employees to temporarily continue health insurance coverage at group rates. Under COBRA, the employee must pay both the employer-paid portion of the premiums and the employee portion of the premiums. However, there are certain things that employers must to do comply with COBRA.

Start of Coverage

• Employers are required to notify employees covered by COBRA when they first become covered by an employer-sponsored group health plan. This notice of COBRA rights must be mailed to employees and family members within a reasonable amount of time. The notice must offer information regarding COBRA continuation rights and information of how marital status changes may affect COBRA eligibility.

Qualifying Event Notifications

• A second notice of COBRA qualification and rights must be made when a change in employment status may reduce or eliminate health insurance coverage. These changes of events are called "qualifying events" and include: Termination, whether voluntary or involuntary, for any reason other than gross misconduct; a major reduction in the number of work hours; an employee enrolling in Medicare; or the death of the employee who is covered under the health insurance. The notice must be mailed within 14 days of the qualifying event. However, some jurisdictions may require that the notice be mailed sooner.

  Those who elect to use COBRA to continue insurance coverage must also be notified when that coverage ends.

Record Keeping Requirements

• Aside from the notification requirements, employers are required to maintain records of sufficient adequacy to ensure that COBRA notices are sent in a timely manner. Records that track who has elected for COBRA coverage and how long they have been using that coverage must also be kept. COBRA payment records must also be maintained.