What is COBRA?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 requires most employers to offer continuation coverage to Qualified Beneficiaries who lose coverage as a result of a Qualifying Event. This was passed in order to provide employees, their spouses and dependents, with a temporary extension of group health insurance when coverage is lost due to a Qualifying Event. COBRA coverage must be identical to the coverage provided to similarly situated active employees.

Do I Need to Offer COBRA?

Any Employer with 20 or more Employees during 50% of business days the previous calendar year is subject to Federal COBRA Law. Individual State laws may vary.

A Covered Employee is any individual who is currently provided coverage under the Employer’s Group Health Plan.

A Group Health Plan is a plan that provides medical care and is maintained by the employer. The benefits include medical, dental, vision, and prescription drug treatments and coverage. Plans subject to COBRA also include HMOs, group insurance plan premiums paid by the employees, treatment programs and clinics maintained by Employers (except first aid care supplied free of charge to employees during working hours), self-insured medical reimbursement plans, employee assistance programs, health flexible spending arrangements (Health FSA) offered under a cafeteria plan, discount programs, and wellness programs.

Any individual covered under the Employer’s Group Health Plan the day before a COBRA Qualifying Event is considered a Qualified Beneficiary. A Qualified Beneficiary is a covered spouse of the covered employee, a covered dependent child of the covered employee or any child born to or placed for adoption with the employee during a period of COBRA coverage. A retired employee who is covered under the plan the day before the bankruptcy is a Qualified Beneficiary as is the covered spouse and dependent children. The Qualified Beneficiary has the same rights as the covered employee under the Plan. A child receiving benefits pursuant to a Qualified Medical Child Support Order is a qualified beneficiary.

There are qualifying events that trigger 18-month COBRA coverage and 36 month COBRA coverage. The Qualifying Event must cause a loss of coverage or change in the level of coverage provided of a Qualifying Event.  COBRA coverage must be identical to the coverage provided to similarly situated active employees.

Failure to provide timely and accurate COBRA notices can result in steep taxes and penalties so let Flex Administrators, Inc. help you stay compliant.

How can Flex Administrators, Inc. help me become COBRA compliant?

Flex Administrators, Inc. offers full service COBRA administration to assist you in maintaining compliance with all of your COBRA requirements. You will have an account manager assigned to assist you as well as all of our online tools which allow you to access and process information 24/7.  Our website offers access to:

  •  Reporting
  • Online Processing
  • Online Access to PDF’s all of Mailed Documents
  • Manage and Collection of Premium Payments

For a COBRA Administration proposal, please complete the Proposal Request or contact our office and ask to speak to someone in the COBRA department.