COBRA allows individuals to temporarily continue their employer-sponsored health care coverage when certain qualifying events occur that would otherwise end the coverage. So who qualifies for COBRA and when?
What Is COBRA?
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) was signed into law by President Reagan on April 7, 1986. COBRA was designed to protect certain individuals who would otherwise lose health insurance as a result of certain events.
It requires group health plans sponsored by employers with at least 20 employees to offer continued group health plan coverage for a specified period of time and gives qualified participants the opportunity to elect and pay for that coverage. COBRA does not apply to church plans and federal government plans.
Who Can Elect COBRA Coverage?
Only qualified beneficiaries are entitled to elect COBRA. A qualified beneficiary is an employee covered by an employer-sponsored group health plan on the day before an event takes place that would trigger COBRA rights, as well as that employee’s spouse, former spouse and dependent children if they were covered by the plan. Dependent children include adopted children.
Domestic partners are not considered spouses for purposes of federal law, including COBRA. Group health plan sponsors that offer domestic partnership coverage may offer COBRA-like rights to domestic partners, but they are not required to do so.
What Events Trigger COBRA Coverage?
There are six common qualifying events that can make a person eligible for COBRA. Learn what they are in this quick video.
How does someone qualify for COBRA? [Watch Now]
Got It? Test Your Knowledge!
Under the New Horizons College health plan, David covers his domestic partner, Rhonda, and Rhonda’s two children from a previous marriage, Heather and Jonathan. David and Rhonda terminate their domestic partnership. Is anyone entitled to COBRA?
- Yes: Rhonda, Heather and Jonathan
- No, because domestic partners and children of domestic partners do not have COBRA rights.
- Yes: Heather and Jonathan
See below for the correct answer!
Need to Know More About COBRA?
Enroll today in the International Foundation e-learning course: COBRA. The online course covers everything plan sponsors need to know about COBRA including which plans must comply, what triggers the obligation to offer COBRA, who must provide COBRA notices, how a qualified beneficiary can elect COBRA and more!
Communications Manager at the International Foundation
Related Reading from Word on Benefits:
- How COBRA Interacts With HSAs, HRAs and FSAs
- Medicare and COBRA Coordination: What You Need to Know
- D-I-V-O-R-C-E (Part 2) – Handling Health Care Benefits
- 9 Questions Parents Are Asking About the Age 26 Mandate
Correct Answer Is 3!
Rhonda is not eligible for COBRA because she is not David’s spouse. However, Rhonda’s children are eligible for COBRA because each is a child that David could cover as a dependent under the group health plan. For purposes of COBRA, it doesn’t matter whether Heather and Jonathan were David’s dependents for other purposes (e.g., whether they were dependents for federal income tax purposes) as long as they were dependents under the terms of the plan.