BASIC COBRA, Now is a Good Time to Look Back

COBRA generally applies to all private-sector group health plans maintained by employers that have at least 20 employees on more than 50 percent of its typical business days in the previous calendar year. COBRA also applies to plans sponsored by state and local governments.

Who counts?  Both full and part time employees count towards your determination as to whether your company is subject to COBRA regulations for 2013.    Each part-time employee counts as a fraction of a full-time employee, with the fraction being equaled to the number of hours that part-time employee worked divided by the hours an employee must work to be considered full time. Also, it does not matter if the employee is covered under the health plan or not.  It is based on hours worked.

Now is a good time to look back to see if your company needs to continue to comply with COBRA regulations in 2013.  If you determine that you did not have 20 or more employees for more than 50 percent of your typical business days in 2012, you can stop complying with COBRA for 2013.  If you are not required by Federal law to continue to offer COBRA continuation, you should not voluntarily offer COBRA.

What does this mean if I no longer have to offer COBRA?

Current COBRA Participants must to be allowed to finish their COBRA timeframes.  For example, if John Smith’s COBRA started July 1, 2012 and ends December 31, 2013, as long as he makes timely payments, then he must be allowed to continue his group health plan until his COBRA timeframe is exhausted.

If you have terminations that occur on or after January 1, 2013, those employees are not eligible for COBRA.  (No Qualifying Event Notice is required.)   You should notify your carrier(s) and broker that you are no longer required to offer COBRA.

If you have new hires or a voluntary removal of coverage, a notice is no longer required to be sent.

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