First Healthcare Compliance CONNECT- December 2017

Spotlight
Sheba Vine, JD, CPCO talks about Qualifying Events that
Trigger COBRA Benefits.
COBRA is a federal law and is short for the Consolidated
Omnibus Budget Reconciliation Act of 1985. COBRA applies to
employers with 20 or more employees that offer group health
plans. COBRA provides the right to continue coverage in an
employer group plan in certain instances.
If an individual elects COBRA coverage, then he or she is
required to pay the full premium at the group plan rate. In
addition to the premium, the employer can charge a 2%
administration fee.
When determining if an employer has to comply with COBRA,
it must have at least 20 employees. To determine this, both
full-time and part-time employees are counted. A part-time
employee only counts as a 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. If
the employer doesn’t have 20 employees, then it is exempt
from COBRA. But many states have a continuing coverage
law that is similar to COBRA. These are referred to as the
mini-COBRA laws.
Under COBRA only qualified beneficiaries have the benefits of
COBRA. A qualified beneficiary is anyone that participates in
the employer sponsored group health plan. This includes all
employees that participate in the group plan, spouses and any
dependent children. It is important to note that the individual
must be covered by the plan on the day before an event that
causes loss of coverage.
There are instances where COBRA benefits would not apply
such as an employee who is not eligible to participate or an
employee who has declined to participate in the health plan.
There are notices that the employer is required to provide under
COBRA. A general notice of COBRA rights must be provided
to covered employees and spouses, within the first 90 days of
coverage under the plan. Employers usually include this notice
in the Summary Plan Description. There is also the election
notice, which describes the right to COBRA continuation coverage
and how to make an election when there is a qualifying
event that causes an employee and his or her family members
to lose health coverage. A qualifying event triggers the right
to COBRA coverage which includes: 1) an employee’s voluntary
or involuntary termination of employment, unless it is due
to the employee’s gross misconduct. Although COBRA does
not define what counts as gross misconduct, many states
refer to the definition provided under the respective state’s
unemployment laws; 2) reduction in hours of employment if
it effects their eligibility under the health plan; 3) divorce or
legal separation of the spouse from the covered employee;
4) an employee’s entitlement to Medicare; 5) the death of a
covered employee; and 6) the loss of dependent status, for
example, when a dependent reaches an age that no longer
qualifies them for coverage under the parent’s health plan.
An individual that elects coverage under COBRA can stay on
the employer’s group health plan for a maximum of 18 or 36
months, depending on the type of qualifying event.
Now that we know what events trigger COBRA, let’s talk
about COBRA and FMLA. FMLA applies to employers with 50
or more employees and it provides up to 12 weeks unpaid job
protected leave for an employee’s serious health condition, for
the birth, adoption, or foster of a child, or for the employee to
care for a family member’s serious health condition. It also
applies for qualifying military leaves which provides for 26
weeks of unpaid job protected leave. For an employee to be
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