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COBRA Laws in the State of Maryland

The Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal program that provides for the temporary continuation of employer provided medical insurance coverage for employees and their covered dependents when the employee retires, quits, has his hours reduced or is fired for any reason except gross misconduct (referred to as a qualifying event, or QE). Maryland has state continuation laws (sometimes referred to as a mini-COBRA program) that provide health insurance coverage in addition to or instead of COBRA coverage.

  1. Size of Employer

    • COBRA laws apply only to employers with 20 or more employees. The employer is required to notify each employee of his right to accept COBRA benefits. Employees of companies that have fewer than 20 employees may be eligible for coverage under Maryland's continuation laws.

    Election Period

    • An employee has 60 days following her loss of employment to accept COBRA benefits. If an employee fails to accept COBRA coverage within 60 days, she loses all of her rights under COBRA. If an employee initially waives COBRA coverage, she may elect to revoke her waiver if she does so within the election period. Reinstated coverage is retroactive to the date of the qualifying event (QE). The initial premium payment must be made within 45 days from the date of the beneficiary electing for coverage.

    Election For Dependents

    • Any individual beneficiary that was included in the employee's group insurance policy can elect for COBRA coverage. An employee or employee's spouse may elect to have coverage on behalf of minor children.

    Coverage Period

    • In most cases, an employee can receive COBRA medical insurance for 18 months, although in some cases, coverage can be extended to 36 months.

    Cost

    • Under both federal COBRA and Maryland state continuation laws, an employee is required to pay 100 percent of the medical insurance premium plus a two percent processing fee.

    Insurability

    • No evidence of insurability is required to be eligible for COBRA coverage.

    Coverage Benefits

    • Coverage benefits under COBRA must be identical to what an employee had under his employer supplied group insurance.

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