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Navigating through COBRA

So many companies are reducing their workforce these days. If your company is one of them, the employee health insurance coverage law known as COBRA may already be on your agenda.

Weeding through COBRA's jungle of legal information can be time consuming. There are deadlines, timelines. Strict eligibility rules, too. To make it easier, here are some basic facts:

• COBRA, short for the Consolidated Omnibus Budget Reconciliation Act, was passed by Congress in 1986.
• It gives certain former employees and their dependents the right to temporarily continue their health coverage at group rates.
• COBRA may apply to your group health plan, if you had 20 or more employees during more than 50 business days in the previous calendar year.

Learn how your employee count is determined 

Both full- and part-time employees are included in your employee count. The U.S. Department of Labor uses a formula to count part-time employees. It's based on hours worked.

Discover the qualifying events 

To be eligible, your employees and their dependents must be covered by your group health plan the day before one of these qualifying events:

• Employee's job termination for any reason, except "gross misconduct"
• Employee's work-hour reduction
• Employee's death
• Medicare eligibility
• Divorce or legal separation

Dependent children may also qualify when they lose their dependent child status. For instance, they reach an age when they no longer qualify under their parent's plan.

Remember the timelines 

• You have 30 days to notify the health plan of an employee's termination, work-hour reduction or death.
• Employees have 60 days to notify the health plan of a divorce, legal separation or a loss of dependent child status.
• A health plan has 14 days from the date of a qualifying event to send a COBRA election notice.
• An eligible individual has 60 days to decide whether to elect COBRA continuation coverage.

See who qualifies 

• Employees, their spouses and dependent children
• Agents, directors and independent contractors
• Retirees, their spouses and dependent children under some conditions
  Learn who pays

Typically, those electing coverage under COBRA pay the entire cost plus an administrative fee. But Congress recently passed new COBRA legislation as part of the economic stimulus package. That means eligible workers may receive a 65% premium subsidy for 9 months.

Get help 

Log on to the U.S. Department of Labor website. You'll find great resources to help you manage COBRA. There are:

• Model COBRA notices
• An Employer's Guide to Group Health Continuation Coverage Under COBRA  (32 pages)
• Workplace posters and more

Are COBRA's timelines and legal rules too much to handle? We have Individual Billing Administration services that can help you navigate through COBRA administration. Contact your Aetna representative to learn more.

Tools for Employers & Organizations

• Find a Doctor or Hospital
• Find a Document or Form
• Manage Your Plan
• Get a Report
• Contact Aetna