If you are a company who employs 20 or more people, you are subject to a law called the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). This program requires employers to offer employees who would otherwise lose their health plan coverage the option of continuing their coverage by paying the premiums themselves directly. In some instances this may include employees covered by Workers Comp.
If you are required to adhere to COBRA, and have a group health plan, you are required to provide COBRA benefits to qualified beneficiaries. These beneficiaries include anyone who was covered under your health plan on the day preceding an event that causes loss of coverage and includes the following:
- employees, including part-time employees, if they are participants in your plan on the day before the qualifying event
- their spouses
- their dependents
- retirees (unless they are eligible for Medicare)
- partners in a partnership
You do not have to offer COBRA coverage to any of the following:
- an employee who is not yet eligible for your group health plan
- an eligible employee who declined to participate in your group health plan
- an individual who is enrolled for benefits under Medicare
