Continuation of Group Health and Life Insurance Coverage, or COBRA, is a federal law that requires employers to continue health insurance coverage for terminated employees under certain circumstances. The employer must have provided group health insurance coverage to employees and have over twenty employees before the law applies. If you are terminated or laid off, you may be entitled to COBRA. Your employer has to provide you with notice giving you the option to continue your insurance coverage under the employer’s plan. Note that the employee is responsible for paying the premium for COBRA coverage. It can be very expensive. Employers typically pay a large portion of health insurance premiums as a benefit for employees. Under COBRA coverage, the employee is responsible for paying the employee’s share along with the employer’s share of the premium. If you have a pre-existing condition, COBRA may still be the most cost-effective option for you. Consult your insurance company regarding your options.
Changes in COBRA with the 2009 Stimulus Bill
There has been a lot of information in the news lately about the economic stimulus package that was signed into law in February 2009. Part of the law included changes to COBRA coverage. The law provides that the government will help subsidize the cost of premiums for your health insurance if you elect COBRA coverage up to 65% of the cost. The subsidy only applies to people involuntarily terminated during a specific time period and does not cover people terminated for gross misconduct. The law actually requires the employer to cover the premium up to 65% and then the employer must seek reimbursement from the government for the share of premium it paid.
Legal Advice on COBRA for Small Businesses and Individuals
If you are a small business owner offering insurance subject to COBRA regulations, you may wish to contact a lawyer about your health insurance options under COBRA. I can assist you with small business planning and navigating the recent changes in insurance laws. If you are an individual with questions about COBRA coverage, your best resource is your insurance company itself. Your plan administrator can explain the premium, coverage, and other terms for you.