Eligbibility

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 coverage.

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.

Qualifying Event
Beneficiary Eligible
For Cobra
Maximum Coverage Time
Termination of job or quit voluntarily
Employee
18 months
Reduced hours
Spouse
Dependent child

Employee entitled to Medicare

Divorce or legal separation

Death of employee

 

Spouse
Dependent child

 

36 months

Loss of dependent-child status
Dependent child
36 month

 

More info visit: http://www.cms.hhs.gov/COBRAContinuationofCov/
03_WhoIsEligible.asp#TopOfPage
and
http://www.aarp.org/health/insurance/articles/cobra.html
and
http://www.dol.gov/ebsa/pdf/cobraemployee.pdf

.