FAQs about COBRA Continuation Health Coverage

FAQs about COBRA Continuation Health CoverageUnfortunately not all business relationships work out and employers and employees part ways. The federal government has mandated policies that employers must adhere to in such cases.

Employees terminated by an employer have the right to receive a final paycheck, the option of continuing health insurance coverage, and may be eligible for severance pay and unemployment compensation benefits. The parting of a business relationship may mean that an employer is involved in the continuation of health benefits coverage for the employee. This can be done through COBRA.

COBRA stands for Consolidated Omnibus Budget Reconciliation Act. This is the federal law that provides many workers with the right to continue coverage in a group health plan. COBRA covers group health plans sponsored by an employer (private-sector or state/local government) that employs at least 20 employees on more than 50 percent of its typical business days in the previous calendar year. Both full- and part-time employees are counted to determine whether a plan is subject to COBRA. Each part-time employee counts as a fraction of a full-time employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full time.

In order for an employee to be entitled to elect COBRA continuation coverage, your group health plan must be covered by COBRA. A former employee can continue health care coverage by paying for the group coverage on his or her own. Learn about the details of COBRA for your company benefits package by contacting the Liberty Run Benefits team. We make it easy to provide affordable coverage for all your employees while meeting federal guidelines.

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