C.O.B.R.A.

Consolidated Omnibus Budget Reconciliation Act

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There are various notifications that are required in order for your company’s HEALTH PLAN to be in compliance with the requirements of COBRA and NYS Continuation.

There are THREE notices that must be sent to current/former employees:

  1. Upon employment, the Plan Administrator and/or employer must provide notice of employee and dependents rights under COBRA. This notice must be by US mail.
  2. Upon the occurrence of a “Qualifying Event” of two types: A) if termination of employment, death of employee or employee becoming Medicare eligible: 14 days after termination. B) if divorce, seperation, or dependent child becoming too old, “the qualified beneficiary” must notify the employer within 60 days of their intent to enroll in COBRA coverage. Then the administrator/employer has 14 days to notify of rights.
  3. Rights of those former employees or their dependents who accept COBRA to then convert this to an individual conversion policy.

After a timely notification has been made the employees and their dependents have 60 days from the later of the “qualifying event” or the date of their notification of their rights, to decide/elect COBRA coverage. If elected, coverage is retroactive to the date coverage would have been lost.

The former employee or their eligible dependent must then pay the full premium (102% is permitted) to the employer within 45days. While for larger groups the insurer may collect the premium on the employer’s behalf, for small companies this may not be available. Therefore the employer should inform the COBRA beneficiary that checks are to be made payable to the employer, since the COBRA beneficiary will remain on the group’s bill.