There are three elements to qualifying for the Consolidated Omnibus
Budget Reconciliation Act of 1985 (COBRA) benefits. COBRA establishes
specific criteria for plans, qualified beneficiaries, and qualifying
events. These elements will determine the period of coverage.
Plans: Group health plans maintained by employers with 20 or
more employees on more than 50% of their typical business days in the
previous calendar year are subject to COBRA. Both full- and part-time
employees are counted to determine whether a plan is subject to COBRA.
Each part-time employee counts as a fraction of an employee, with the
fraction equal to the number of hours that the part-time employee worked
divided by the hours an employee must work to be considered full-time.
Qualified Beneficiaries: A qualified beneficiary generally is
an individual covered by a group health plan on the day before a qualifying
event. Depending upon the event, the following individuals may be qualified
beneficiaries: a "covered employee" (a term that includes
active employees, terminated employees and retirees); a covered employee's
spouse and dependent children; any child born to or placed for adoption
with a covered employee during the period of COBRA coverage; agents;
self-employed individuals; independent contractors and their employees;
directors; political appointees; and elected officials.
Qualifying Events: "Qualifying events" are certain
events listed in the COBRA law that would cause an individual to lose
health coverage. The type of qualifying event will determine who the
qualified beneficiaries are and the amount of time that a plan must
offer the health coverage to them under COBRA. (Click on "Standard
Periods of Coverage," "Extended Periods of Coverage,"
and "Contracted Periods of Coverage" on the left navigation
bar.) A plan, at its discretion, may provide longer periods of continuation
The qualifying events for covered employees are
- voluntary or involuntary termination of employment for any reason
other than "gross misconduct."
- reduction in the number of hours of employment.
The qualifying events for spouses are
- voluntary or involuntary termination of the covered employee's
employment for any reason other than "gross misconduct."
- reduction in the hours worked by the covered employee.
- covered employee's becoming entitled to Medicare.
- divorce or legal separation of the covered employee.
- death of the covered employee.
The qualifying events for dependent children are the same as for the
spouse with one addition
- loss of "dependent child" status under the plan's rules.
The following chart shows the specific qualifying events, the qualified
beneficiaries who are entitled to elect continuation coverage, and the
maximum period of continuation coverage that must be offered, based
on the type of qualifying event. Note that an event is a qualifying
event only if it would cause the qualified beneficiary to lose coverage
under the plan.
Maximum Coverage Time
Termination of job or quit voluntarily
Employee entitled to Medicare
Divorce or legal separation
Death of employee
Loss of dependent-child status
More info visit: http://www.cms.hhs.gov/COBRAContinuationofCov/