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COBRA

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The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers to offer employees and their dependents the option to continue health insurance coverage after certain qualifying events, such as termination or reduction in hours.

 
Requirements

  • Who Must Comply – Employers with 20 or more employees who offer group health plans.

  • Qualifying Events – Termination of employment, reduction in hours, divorce, legal separation, or dependent aging out of coverage.

  • Notice Requirements – Employers must provide timely notices, including the Initial COBRA Notice and the Election Notice.

  • Coverage Length – Typically 18 months, but may extend up to 36 months depending on circumstances.

  • Cost – Employees may be charged the full premium plus a 2% administrative fee.

 

Why this matters:
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  • Non-compliance can result in penalties of $110 per day per beneficiary plus potential lawsuits.

  • COBRA integrates with offboarding, payroll deductions, and benefit systems—so it can’t be an afterthought.

 

At Sprout & Vine, COBRA notices and administration are built into your benefits and offboarding processes, ensuring employees receive timely coverage options and you remain compliant.

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