Employment Law Basics: How to Keep From Getting Bitten by COBRA

Employment laws can be confusing and downright scary.

They don’t have to be. As a public service, from now until my special Halloween webinar Answers to the World’s Scariest Employment Law Questions, I’ll be tackling each major law one by one to give you what you REALLY need to know. By the end, you’ll have handy one-page cheat sheets for each and every law and your terror level will be reduced to zero.

Today’s Topic: COBRA

Here is basically everything you need to know about the Consolidated Omnibus Budget Reconciliation Act (COBRA) in one handy post.


What health plans are covered?

Those for employers that employ 20 or more employees

What’s guaranteed to employees?

  • Continued health care coverage to employees, former employees and/or qualified beneficiaries after the loss of previous coverage as a result of certain qualifying events.
  • Coverage continues at the same level provided before the qualifying event

What are examples of “Qualifying Events?

  • Termination;
  • Reduction of hours;
  • Participant becomes disabled;
  • Death or divorce;
  • Dependent child loses dependent status.

How long does coverage generally continue?

  • 18 months for termination and/or a reduction in hours.
  • 29 months for cases involving disability.
  • 36 months for death of a covered employee or divorce.

What notice requirements are there?

  • General notice describing COBRA rights must be provided to participants within 90 days after plan participation begins.
  • Employers generally must provide plan administrators with notice within 30 days of the occurrence of a qualifying event.
  • Plan administrator must provide participants with an election notice of COBRA rights within 14 days of a qualifying event (44 days if the plan administrator is also the employer).

How long does a participant have to elect coverage?

Sixty (60) days from the date of the qualifying event or the date the election notice is provided, whichever is later.

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Can the plan require the participant to cover the cost of premiums?

Yes, including any portion of the premium generally by the employer on behalf of active employees.

When can the coverage be cut off?

  • A participant fails to pay required premiums.
  • Employer discontinues health care plan.
  • Under certain circumstances where participant obtains subsequent coverage.

What are the potential penalties for failing to comply?

  • Monetary penalties.

Top COBRA tips

  • Ensure that all notices go out to employees and participants within the required time.
  • Notify all participants about any changes in health benefits.

Stay tuned for more. Next, we’ll de-scare-ify the Equal Pay Act (EPA).

This was originally published on Manpower Group’s Employment Blawg.

Mark Toth has served as Manpower Group North America's Chief Legal Officer since 2000. He also serves on the company’s Global Leadership Team, Global Legal Lead Team and North American Lead Team. Mark is recognized as an expert on legal issues affecting the U.S. workplace and is frequently quoted in media from The Wall Street Journal to 60 Minutes. He is also a past Chair of the American Staffing Association and is a certified Senior Professional in Human Resources. Contact him at mark.toth@manpowergroup.com.


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