COBRA MANDATES
BRS Members must be in compliance with “Cobra” Mandates.
Business Resource Services (BRS) is rated as a group, therefore all members of BRS are required by law to comply with COBRA mandates regardless of the number of active employees. Failure to comply with COBRA requirements may result in serious penalties.
Under COBRA, an employer must give covered employees (including spouses and dependent children who are covered) the opportunity to elect continuation coverage under an employer maintained group health plan (including plans to which the employer does not contribute financially) after any of the following events:
- The death of the covered employee;
- The divorce or legal separation of the covered employee;
- A reduction in hours that result in a loss of coverage, or the termination of the employee’s employment, unless for gross misconduct;
- The covered employee becomes entitled to Medicare;
- A dependent child ceases to be covered by the plan due to his or her attained age;
- The filing by the employer for Chapter 11 bankruptcy
Continuation Coverage
The coverage that is offered must be identical to the medical coverage offered prior to separation. The plan may require the covered employee (spouse or dependents) to pay a premium, but generally cannot exceed 102% of the cost to the plan for a person in a similar situation.
Terminated employees and employees with reduced hours must be provided coverage for up to 18 months (up to 29 months if disabled [by Social Security definition] during the first 60 days of COBRA coverage). Widows, divorced spouses, spouses of Medicare eligible employees and dependent children who become ineligible are given up to 36 months of coverage.
Written notification must be given to all employees of his or her continuation coverage rights when they first become eligible for benefits under your plan.
For more information regarding “COBRA” laws call your broker or the U.S. Dept. of Labor, Pension and Welfare Benefits Administration (617) 565-9600.
