Mar. 24, 2009 - Helping Clients Deal with the New COBRA Subsidy Rules

Employers who maintain group health plans covering at least 20 employees are required to offer terminated employees and their dependents (i.e., qualified beneficiaries) the opportunity to continue to participate in the group health plan for up to 18 months. The employer must notify the plan administrator (typically the insurance company) within 30 days of the qualifying event (i.e., loss of employment). Within 14 days of receiving this notice, the plan administrator must notify the qualified participants of their rights under COBRA. Generally, employers offer this COBRA continuation coverage to qualified beneficiaries by having the individual pay the actual cost of the coverage plus a 2% administrative fee.

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