Health CoverageCOBRA BenefitsAs a small business owner, you must obtain your own health insurance coverage. Here are some helpful hints.
If you or your spouse lost a job, then medical coverage, too, is lost. However, if your employer has 20 or more employees (with some exceptions), you can elect COBRA coverage through your existing employer. COBRA stands for the Consolidated Omnibus Budget Reconciliation Act of 1985. Here are a few details about COBRA coverage in general:
- Continued coverage is available for a period ranging from 18 to 36 months depending upon the qualifying event.
- The premium cost charged to the employee cannot exceed 102% of the cost to the plan for coverage.
- The benefit coverage must be the same under COBRA as the employee had prior to the qualifying event.
- There are no "evidence of insurability" conditions.
Qualifying events include the following:
- Death of the employee.
- Termination of employment, other than for gross misconduct.
- Reduced work hours.
- Divorce or legal separation.
- A dependent child no longer meets the dependency requirements; i.e. graduates from college.
Employees and their dependents must be notified in writing of their eligibility for COBRA coverage. The employee then has 60 days from the later of the date of the COBRA notice or the date of the qualifying event to elect coverage.
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