COBRA is a Federal Law whereby terminated employees, those who lose coverage because of reduced work hours, and / or covered dependents may be able to continue on the group medical and dental benefits for limited periods of time. If entitled to benefits, the health plan must provide a notice of rights and allow the qualified beneficiary 60 days to elect to continue. Once selected, the continuee(s) pays the full premium (100% of the employer plus 100% of the employee contribution) and the employer may impose a 2% surcharge. Persons extending coverage to 29 months due to Medicare disability may be charged 150% of the total premium.
Generally, employers, including self-insured employers, with 20 or more on payroll (including full time, part time, union and non-union) for 50% of business days in the preceding year must offer COBRA continuation of the group health plan.
Note: Independent Contractors (1099 employees) do not count in the 20 or more employees.
The Employer has 14 days to mail the notice. If the employer uses a COBRA admininstrator, an additional 30 days is given to provide the notice.
TIP: It is recommended that the notice be mailed First Class mail or with a Certificate of Mailing available at any post office.
60 days from loss of coverage or receipt of the election notice.
Continuees pay the full premium being charged by the carrier, 100% of the employee and employer contribution and the premium is paid to the employer.
The employer may charge a 2% administrative fee.
For those who extend coverage from 18 to 29 months due to Medicare Disability, the employer may charge 150% of the total premium.
Yes. They are removed when they have enrolled in other group coverage.
Persons covered the day of the Qualifying Event are called Qualified Beneficiaries and each is entitled to continue independently.
For employees: termination of employment for other than gross misconduct or reduction of work hours whereby the person loses eligibility for coverage. For dependents: death of the employee, divorce or legal separation from the employee, loss of dependent child status under the plan rules e.g no longer eligible due to age, marriage, or loss of full time student status.
Employees may continue 18 months with or without their dependents.
A member who is deemed Medicare disabled retroactively to a date within the first 60 days of being on COBRA may extend their COBRA to 29 months.
Dependent Qualifying Events allows continuation for 36 months.
COBRA Continuees that are Qualified Beneficiaries have the same rights as Active at Work employees. If the employer allows dependent coverage, the COBRA continuee may add a spouse or child.
Yes. They must be offered COBRA
Yes. Qualified Beneficiaries have the same rights as those who are Active at Work.
If the employer already has a plan in place that will accomodate the member, s/he will be able to move to the other plan immediately without waiting until open enrollment.
If there is no other plan in place, the employer is not obligated to create a plan solely for the continuee.
HSAs are tax-advantaged savings accounts that can be used to pay for medical expenses incurred by individuals, their spouses and dependents.
HSAs may be offered under a cafeteria plan.
For 2006 the minimum deductible for self-only is $1,050 with a maximum out of pocket of $5,250. Contributions to the account are capped at $2,700 or the minimum deductible of the HDHP. The minimum deductible for other than single is $2,100 with a maximum out of pocket of $10,500. Contributions are capped at $5,450 or the minimum deductible. Individuals age 55 and older may contribute up to $700 in catch-up contributions for 2006.
Someone who has a high deductible plan.
No other health coverage in place except Workers' Compensation, specific disease or illness, accidents, dental care, vision care, long-term care.
Not enrolled in Medicare (can be eligible for Medicare).
Cannot be claimed as a dependent on someone else's 2004 tax return.
Contributions by the employer are not included in the individual's taxable income. Contributions by an eligible individual are tax deductible. Contributions by family members of an eligible individual are deductible by the eligible individual.
For 2006, the minimum deductible for self-only is $1,050 with a maximum out of pocket of $5,250. Contributions to the account are capped at $2,700 or the minimum deductible of the HDHP. The minimum deductible for other than self-only is $2,100 with a maximum out of pocket of $10,500. Contributions are capped at $5,450 or the minimum deductible.
Individuals age 55 and older may contribute up to $700 catch-up contribution for 2006.
You must have the same coverage all year to contribute the full amount.
Once the money is in the account, regardless of who deposits the money, it belongs to the employee.