COBRA (Consolidated Omnibus Budget Reconciliation Act) provides certain former employees, retirees, former spouses, and dependent children the right to temporary continuation of health coverage at group rates.
Among the “qualifying events” listed in the statute are loss of benefits coverage due to:
1) The death of the covered employee;
2) An employee loses eligibility for coverage due to involuntary termination or a reduction in hours as a result of resignation, discharge (except for “gross misconduct”), layoff, strike or lockout, medical leave, or slowdown in business;
3) Divorce or legal separation that terminates the ex-spouse’s eligibility for benefits; or
4) A dependent child reaching the age at which he or she is no longer covered.
COBRA imposes different notice requirements on participants and beneficiaries, depending on the particular qualifying event that triggers COBRA rights.
COBRA does not apply, on the other hand, if employees lose their benefits coverage because the employer has terminated the plan altogether or if the employer has gone out of business.
COBRA does not, unlike other federal statutes such as the Family and Medical Leave Act (FMLA), require the employer to pay for the cost of providing continuation of coverage. Instead, it allows employees and their dependents to maintain coverage at their own expense by paying the full cost of the premium the employer previously paid, plus up to a 2% administrative charge (50% for the latter 11 months under the disability extension).
COBRA coverage is typically 50 percent more expensive than Ohio individual health insurance. Click here to generate a free price quote from several Ohio Insurance providers.