The Consolidated Omnibus Budget Reconciliation Act, or COBRA, is a federal statute that assists employees in keeping their health insurance benefits after they lose their employer-sponsored insurance.
The COBRA health benefit provisions amend the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code, and the Public Health Service Act. These amendments compel group health plans to offer a temporary continuation of group health coverage that would otherwise be canceled.
When an employee loses their job, has to reduce their hours of work, or loses coverage for whatever reason, the COBRA rules take effect and enable employees who are covered by employer-sponsored health plans to keep their family’s health care coverage.
All private-sector group health plans maintained by businesses with at least 20 employees on more than half of their regular business days during the prior calendar year are generally subject to COBRA.
To assess whether a plan is subject to COBRA, both full-time and part-time employees are taken into account. Each part-time worker represents a portion of a full-time worker, with the portion determined by dividing the number of hours worked by the number of hours necessary to qualify as a full-time worker.
Plans supported by local and state governments are likewise subject to COBRA. However, initiatives supported by the federal government, churches, and specific church-affiliated groups are exempt from the statute.
As for workers, workers must be qualified beneficiaries to be eligible for Cobra benefits.
Also, employer health plans are only required to offer COBRA continuation coverage to beneficiaries following a qualifying event that results in a covered employee losing coverage.
Who Are Qualified Beneficiaries?
Employees who were covered by a group health plan on the day before a qualifying event are considered qualified beneficiaries, but they are not the only ones eligible. Multiple other parties could be deemed eligible in certain circumstances.
Examples of other qualified beneficiaries include:
- A qualified employee’s spouse or ex-spouse
- A qualified employee’s dependent child
- An employer’s agents
- Independent contractors
- Directors who participate in the group health plan
Sometimes, a retired employee, their spouse, ex-spouse, and dependent child may also be considered qualified beneficiaries, but only in specific circumstances. In addition, a covered employee’s child who is born to them or placed for adoption with them during continued coverage is automatically regarded as a qualifying beneficiary.
What Are Qualifying Events?
An incident that results in the loss of group insurance is a COBRA qualifying event. There are a set number of months of continuation coverage for every qualifying event. However, there is always the option for a plan to offer longer durations of continuous coverage.
The California Department of Human Resources outlines several qualifying events and their corresponding length of continuous coverage. These events include:
- Reduction in the covered employee’s hours of work, resulting in loss of coverage (18 Months)
- Voluntary or involuntary termination of employment for any cause other than gross misconduct (18 Months)
- Divorce or other form of legal separation (36 Months)
- The child ceases to be a dependent (36 Months)
- The covered employee’s death (36 Months)
Though you may be a qualified beneficiary experiencing one of the events above, other factors may impact whether you receive your Cobra benefits.
Several actions can prevent you from obtaining your COBRA benefits. COBRA and related legislations set forth employer responsibilities, but your company may fail to uphold these duties, costing you your coverage. Additionally, errors made by Los Angeles employers or plan administrators frequently result in significant financial loss and emotional distress for employees.
When employees choose to select COBRA and keep their health insurance coverage, employers must notify them. If they don’t, they risk fines or being forced to pay for any additional medical expenses arising from the delay. Your employer may also be subject to fines if they mistakenly notify you that you are ineligible for COBRA.
Additional instances in which your employer or the administrator of your plan might have violated your rights include:
- Failing to give you any Cobra notice
- Failing to send you all appropriate documents
- Sending you a partial notice without the required information
- Providing you with a notice that is too difficult to understand
Legal action against your employer or the plan administrator may also be an option if you weren’t given enough notice, and you may be entitled to recover damages. A lawyer can assist you in determining your eligibility for benefits or damages and in constructing your case.
COBRA benefits may not be accessible if, among other things, the former employer or plan administrator fails to send the required paperwork within 44 days or fails to provide COBRA participants with the same benefits as current employees. Separation and termination agreements might also cause problems concerning the right to COBRA coverage.
After a qualifying event, being notified about your COBRA benefits within the set time frame is an invaluable right. When an employer fails to give you that notification or jeopardizes your access to benefits and some other way, you may have legal recourse against them for various losses. Anyone who has been wrongly denied COBRA coverage or was never informed of their eligibility should speak with an experienced Los Angeles employment law attorney.
At Blackstone Law, we represent the interests of our clients honestly and ethically, treating them like family. Our attorneys are committed to defending workers’ rights and will attempt to ensure that you receive every legal remedy available to you. Send us a request form or give us a call at (310) 956-4054 to set up a free consultation.