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Cobra Laws in Michigan

COBRA, which stands for Consolidated Omnibus Budget Reconciliation Act (of 1985) allows employees and their dependents who have lost health benefits from their employer, because of certain qualifying events, to continue their coverage. Individuals and their dependents must meet specific criteria to qualify for and continue COBRA coverage and they must pay premiums.

  1. Qualifying Events

    • Death, termination (voluntary or unvoluntary), reduced hours, divorce or legal separation and entitlement to Medicare qualify a person for COBRA. Employers have 30 days to notify health plan administrators after an employee has been terminated, died, had their hours reduced or become eligible for Medicare. Beneficiaries have 60 days to notify plan administrators after a divorce or legal separation. Employers then have 14 days to send COBRA election notices to plan participants and beneficiaries.

    Electing Coverage

    • After receiving the COBRA election notice, individuals have 60 days to notify plan administrators that they wish to elect coverage. Individuals then have 45 days to pay the initial COBRA premium. When coverage is denied, individuals must be notified within 90 days. The notification must include an explanation of reasons for denial and information on how to appeal. Individuals then have 60 days to file an appeal.

    Premiums

    • COBRA premiums cannot exceed the combined participant and employer cost for other individuals in the plan who still have coverage, plus two percent for administrative costs. If your employer's group health coverage rates increase while you are receiving COBRA, you will be required to pay the increased rate.

    Special Situations

    • Individuals working for organizations with less than 20 employees, church-sponsored plans and the federal government are not eligible for COBRA. Federal employees are covered under a similar plan. If an individual's employer (or former employer) goes out of business or discontinues health insurance coverage, the individual's COBRA coverage will also cease.

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