COBRA CONTINUATION COVERAGE
The Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, ("COBRA"), gives employees and their covered dependents who lose their health benefits the right to continue their coverage when the loss is due to a voluntary or involuntary termination of employment, reduction in hours, death of the employee, divorce, or a dependent who loses eligibility under the terms of the Plan. These individuals can be required to pay 102% of the entire cost of the coverage.
Involuntarily terminated employees can elect to pay 35% of the COBRA premium under the American Recover and Reinvestment Act of 2009, the employer can recover the 65% as a set off from their Payroll Taxes.
COBRA applies to employers with 20 or more employees in the prior calendar year. COBRA law and regulations specify how employees and family members may elect continuation coverage, pay for coverage, and file disputes for any adverse decisions. It also requires employers and plans to provide specific COBRA notices when an employee enrolls in the plan and when the employee terminates coverage under the plan. Employers who fail to comply can be subject to fines up to $110/day for the period of non compliance. Employers can be held liable for the actual claims that are incurred by persons who were not offered COBRA in a timely manner.
HFS offers COBRA services that comply with the law and reduce the risk of fines and claims liability for a low monthly cost. Contact HFS to discuss our service and learn more about COBRA.