How to Administer Cobra

When an employee quits or is fired, it is the duty of the employer--a duty usually handled by its human resources staffers--to notify that employee and the administrator of the company's group health insurance plan that the former worker is now eligible for COBRA benefits. This program gives employees the right to continue receiving group health insurance from their former employers--at their own cost--for up to 18 months. Fortunately for employers, administering COBRA is a fairly simple process.

Instructions

• 1

  Check the rules to see if the company is required to make COBRA available for its former employees. This job is usually taken on by the staffers in the company's human resources department. Companies have to provide their former employees access to COBRA if the company has 20 or more employees on more than 50 percent of its typical business days.

• 2

  Evaluate to see if the former employee is eligible to receive COBRA benefits. Former workers can receive the COBRA insurance extension if they were fired or quit for reasons other than gross misconduct. They can also receive the benefit if their employers reduced their working hours so severely that they no longer count as full-time employees eligible for the company's health insurance plan.

• 3

  Investigate to learn if the employee has any qualified beneficiaries that are also eligible for COBRA. These usually include the employee's spouse and dependent children.

• 4

  Notify the plan administrator of the group health insurance plan that a new former employee is eligible for COBRA benefits. The company must make this notification within 30 days after the former worker has quit or been fired.

• 5

  Send the former employee an election notice no later than 14 days after notifying the plan administrator. This election notice gives former workers the option of signing up for COBRA benefits. Former workers have 60 days to sign up for COBRA continuing coverage.