Frequently Asked Questions

• What is COBRA?
• Who is subject to COBRA?
• What plans are subject to COBRA?
• What triggers the obligation to offer COBRA?
• What is a triggering event?
• What is a loss of plan coverage?
• Who must be offered COBRA?
• What type of COBRA coverage should be offered?
• How long does COBRA last?
• What is a multiple COBRA event?
• Does the COBRA notice have to be mailed?
• When should the COBRA notice be mailed?
• What kind of premium may I charge to a COBRA participant?
• How long does the COBRA participant have to enroll in COBRA?
• What are the consequences for failing to comply with COBRA?

Answers

• What is COBRA?
  It’s the continuation of group health plan coverage. This includes Medical, Dental, Vision, FSA and HRA.
• Who is subject to COBRA?
  Employers who have 20 or more employees on a typical business day during the previous calendar year.
• What plans are subject to COBRA?
  COBRA applies to group health plans that provide medical care and are maintained by an employer.
• What triggers the obligation to offer COBRA?
  A loss of plan coverage and a triggering event.
• What is a triggering event?
  COBRA has a list of seven triggering events: termination/reduction in hours/death/divorce or separation/loss of dependent status/Medicare/and employer bankruptcy.
• What is a loss of plan coverage?
  When the qualifying event causes a change in the terms/conditions of the group plan(s).
• Who must be offered COBRA?
  Every qualified beneficiary who was covered by a group health plan immediately before the triggering event.
• What type of COBRA coverage should be offered?
  Coverage must be identical to the coverage that was provided before the triggering event (if available).
• How long does COBRA last?
  Generally speaking COBRA lasts for 18 months. But it could last for up to 36 months depending on the event/multiple events or disability.
• What is a multiple COBRA event?
  When the participant and/or eligible dependents have more than one event within an 18 month period.
• Does the COBRA notice have to be mailed?
  Yes, a COBRA notice must be mailed to the last known address of the participant/eligible dependent(s). We recommend sending the notice by proof of mailing.
• When should the COBRA notice be mailed?
  The COBRA notice should be sent as early as possible. The requirement when outsourcing to a TPA (third party administrator) is 44 days from the loss of group coverage.
• What kind of premium may I charge to a COBRA participant?
  Employers may charge 100% of the insurance premium plus administrative fees (if applicable). Most employers charge 2% as an admin fee.
• How long does the COBRA participant have to enroll in COBRA?
  Participants have a total of 105 days to elect continuation coverage (60 days to complete the enrollment form & 45 days to send the back premium payments).
• What are the consequences for failing to comply with COBRA?
  COBRA is the only plan governed by both the DOL and the IRS. Depending on the situation: lost premiums, medical costs, and/or penalties of $110 per day by the DOL for providing a late notice have been documented. The IRS may also assess a fee of $115 per day if your forms are out of compliance. If you aren’t familiar with COBRA and its provisions you should consult an attorney and/or a Third Party Administrator such as eCOBRA.com.

Contact Us Today!

Contact us today by clicking here or by phone at (608) 268-5133. You may also consult one of our Online Live Support sales representatives by clicking here.