FAQs About COBRA

In most cases, when an employee is terminated or moved to part-time, their normal insurance continues until the last day of the month. However, if the company has a same-day termination setting, then insurance will end on the day of termination. If they choose to enroll in COBRA, and do so within the election period, their COBRA will start (retroactively) on the day after their normal insurance ends.

For example, assume an employee's coverage ends on 4 /30:

  • Their COBRA election window begins on 5/1. So long as they enroll in COBRA within the election period, they'll be covered by COBRA from 5/1 on.
  • Even if their COBRA is not approved until 5 /20 or some later date, they still have COBRA coverage from 5/1, and can submit claims for care expenses that occur between 5/1 and 5 /20.

In some cases, insurance carriers have slightly different rules about when coverage ends, but COBRA always starts on the day after coverage ends.

To remove a dependent from COBRA coverage, employees will need to contact their COBRA Administrator.

The cost of COBRA coverage includes the full amount of the participant's premium, any premiums for dependents, and the administrative fee, which is a percentage of the total premiums (2% for Federal COBRA; percentage varies by state for State Mini-COBRA).

While plan coverage stays the same for the COBRA participant regardless of the type of COBRA they are enrolled in, there are two primary differences between Federal and State COBRA:

  • Where payments are sent:
    • Payments for Federal and non-carrier administered State COBRA are paid by the employer who is then reimbursed by the employee.
    • Payments for carrier-administrated COBRA (e.g., Cal-COBRA) are paid by the employee directly to the carrier.
  • The cost of COBRA:
    • Federal: Premium + 2% administrative fee
    • State: Premium + variable state-specific administrative fee

In rare cases, COBRA participants are limited in the types of coverage they can select during open enrollment for Federal and State COBRA.

Consolidated Omnibus Budget Reconciliation Act (COBRA) allows employees to continue to receive benefits under their employer's group health plans after losing coverage due to a change from full-time to part-time employment, or after termination. From an employee's perspective, COBRA coverage is essentially the same as normal (full-time) coverage, except for two primary differences:

  • Employees pay their entire premium, plus an administrative fee. Companies have the option to cover the premium, but are not required to.
  • COBRA coverage is temporary. Actual duration depends on the type of COBRA (state or federal), but usually lasts up to 18 months.

Unlike your premiums for group health plans, which are shared between you and your employer, you are responsible for the entirety of your COBRA premium (and your dependents' premiums, if you have any). Your current or former employer may choose to cover your premiums for a certain number of months. 

Generally, employees who were enrolled in a group health plan at the time of their reduction in hours below full-time or their termination are eligible to enroll in COBRA and continue on their employer's plan(s). See this page for more information.

Spouses and dependents who were enrolled on the plan of a covered employee are also eligible for COBRA when the employee loses coverage due to termination or reduction in hours. Dependents can also become eligible in the event of divorce or death of the covered employee.

COBRA coverage begins on the date that coverage is lost (usually the first of the month following termination). Employees who enroll in COBRA later in their election window (which begins on the date of coverage loss) will have coverage retroactively to that date, and will need to pay for retroactive coverage. In some cases, this cost may include up to 2 months of coverage.

For example, Federal COBRA has an election window of 60 days. Let's assume the following:

  • The employee is terminated on September 27th, and their coverage extends through the end of that month.
  • COBRA coverage would begin on October 1st (first of the month following termination).
  • The employee has 60 days from October 1st to elect COBRA. However, their COBRA effective date of October 1st stays the same regardless
  • The employee elects COBRA on November 15th, and is responsible for paying retroactively for coverage in October and November.

For most states, children age out of their parents' medical insurance plans when they turn 26.  However, the insurance carrier may allow them to stay enrolled on the plan if they are a full-time student or disabled.  There may also be specific state rules that allow dependents to stay enrolled longer, so make sure to check with your insurance carrier or your insurance broker.

For dental and vision insurance, there may be different rules that dictate when a dependent child is no longer eligible to remain on the plan.  For example, some dental providers only allow children to stay enrolled until age 19, so make sure to check the rules of your specific plan.

If your company offers COBRA through Zenefits' COBRA partner, COBRA Complete or Accrue, and if the dependent is eligible for COBRA, the dependent information will be sent to the partner. The COBRA election notice packet will be sent to the dependent's address as per Zenefits records. If your company is administering COBRA outside of Zenefits, please contact your company administrator.

Yes, dependents who are removed from the employee's group insurance plans via a Qualifying Event with the reason as divorce or legal separation, are eligible to enroll in COBRA. The employee or dependent can notify the COBRA administrator for enrollment.

If your company offers COBRA through Zenefits' COBRA partner, COBRA Complete or Accrue, and if the dependent is eligible for COBRA, the dependent information will be sent to the partner. The COBRA election notice packet will be sent to the dependent's address as per Zenefits records. If your company is administering COBRA outside of Zenefits, please contact your company administrator.

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