Extending group health plan coverage to employees who lose coverage
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that establishes a legal obligation for most employers to extend group health plan privileges for limited periods of time under certain circumstances to employees who would otherwise lose coverage.
All employers maintaining a group health plan are affected by COBRA unless one of the following criteria are matched:
The employer employed fewer than 20 employees (20 full time equivalents) on at least 50% of its typical business days during the previous calendar year. Small employers have the option of counting employees by pay period rather than every business day. Part-time employees are counted as partial employees. For example, if a full-time employee works eight hours a day and a part-time employee works four hours a day, the part-time employee would count as one-half of an employee for purposes of the 20 employee threshold. Also, for purposes of the 20 employee threshold, employees of all companies that are in a controlled group...
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