COBRA stands for “Consolidated Omnibus Budget Reconciliation Act of 1985”. This federal law keeps the door open for group health benefits. Even after a qualifying event, employees and their dependents can keep group health benefits. Usually, the insurance for a group health care plan is fairly simple for both the employer and the employee.

Before the employee is officially COBRA eligible, they will split the cost of the healthcare plan with their employer. After they are COBRA eligible, the employee has to assume all responsibility for paying the entirety of the healthcare plan. This money comes straight out of the employee’s pocket given their new COBRA eligibility.

This ideology changes a bit when the ICHRA is involved. If the benefit that the employer has sponsored is an ICHRA, employees are technically required to purchase their own individual healthcare plan so they can actually receive a reimbursement through the HRA. Is the COBRA premium still required given this plan is fully owned by the employee?

What Are the COBRA Requirements?

There are COBRA requirements for various employers depending on the size of their organization. If the company has 20 or more employees, they have to offer a certain level of continuation coverage to their employees and their dependents for a minimum of 18 months. This comes into effect if their employees end up losing their healthcare insurance due to the occurrence of a qualifying event. The following are considered qualifying events: divorce, job loss, or death of the employee.

The Qualifications for COBRA

There are various situations that are considered COBRA qualifying events. If an employee no longer works for the company or they are now working reduced hours, these are considered COBRA qualifying events. Also, if the termination of employment causes employees to lose their insurance after work, then they are allotted time to change their individual health insurance policy.