COBRA Insurance for Employers

Information about COBRA for employers

COBRA is a law that requires many businesses to offer the continuation of health care insurance to employees and their beneficiaries after job loss or a qualifying event. Under this law, employers must meet many requirements to ensure they are not liable for fines and/or lawsuits.

Included in those requirements is providing specific information about enrollment in the health insurance program, as well as providing election notices when an employee is terminated, retires, or quits. Learn about your key COBRA responsibilities as an employer below.

COBRA Employer Responsibilities

COBRA, which is short for the Consolidation Omnibus Budget Reconciliation Act, is a federal law passed in 1986 that requires group health insurance providers to provide an optional continuation of care to qualified participants in the event of job loss or a reduction in hours. For employers, it is imperative you follow both federal and state COBRA laws to ensure that you do not incur large fines for failing to comply. This responsibility, under federal law, requires that the employer takes a number of actions to ensure compliance. For the COBRA employer, there are certain actions that must be taken in accordance with the law. They include:

• You must notify employees and spouses that would be covered through the COBRA program of their right to COBRA insurance coverage at the start of the health insurance plan.
• You must notify employees and other covered beneficiaries within 14 days of the date that the covered individual(s) qualifies for COBRA insurance. The company is required by law to provide all the necessary forms and documents. Normally this should be through certified mail or in person with a signed form acknowledging they received it.
• You must keep accurate records that you properly notified the employees of changes during the policy and at the time of COBRA qualification.
• You must track COBRA election periods and the length of time that an employee has been enrolled in coverage under the law.
• You must provide invoices to COBRA informing them of the premium payments and any short bill payments. These must be balanced and recorded.
• You must keep all records of correspondence regarding COBRA coverage.
• If your plan changes, you must notify COBRA, through the entire time of coverage.
• You must notify the employee when insurance benefits terminate.