COBRA Administrator, Clarity Benefit Solutions, Shares Five Common COBRA Questions Employers May Have
NEW YORK, Nov. 1, 2017 /PRNewswire-iReach/ -- COBRA Administrator, Clarity Benefit Solutions, shares five common questions employers may have for COBRA administration companies.
- What is COBRA? The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a health benefit that modifies the Employee Retirement Income Security Act, the Internal Revenue Code, and the Public Health Service Act. It requires employers to provide a temporary continuation of group health coverage that otherwise might be terminated.
- How does COBRA work? When someone is ineligible to receive the benefits of health insurance (most likely due to a qualifying event like a voluntary departure of layoff), an employer ceases paying the employee's premiums. COBRA mandates that the employer offers continuation coverage to the employee, spouses and former spouses, and dependent children. It is typically more expensive to the ex-employee since the employer no longer is contributing to the coverage.
- How does an employer qualify for COBRA? COBRA eligibility depends on the size of the company. To qualify for COBRA, the employer must be a state or local government agency, or a private sector company with 20 or more employees. Plus, the employee must have been enrolled in his or her employer's group health insurance plan on the day before the qualifying event occurred that caused the employee to lose his or her insurance.
- What are the regulations regarding informing employees about COBRA? It is the responsibility of group health plans to present covered employees and their families with notices that explain their COBRA rights. The ex-employee should receive a Summary Plan Description (SPD) within 90 days after the employee first becomes a plan participant. A general notice must also be sent to the employee and spouse that describes COBRA rights—also within 90 days.
- How long does COBRA coverage last? COBRA coverage must be continued from the date of the qualifying event for a period of 18 or 36 months. The coverage period is 18 months if the qualifying event is the termination of employment or a reduction in hours; and 36 months for any other reason.
About Clarity Benefit Solutions: Clarity Benefit Solutions provides technology that makes the health insurance plan selection process fast, easy, and straightforward. For over two decades, we have provided clients with industry-leading technology, compliance, and exceptional customer service. Our offering is designed to save time and lower the costs of managing benefits while also promoting employee self-service and automated ACA compliance.
Media Contact: Calvin Clark, Clarity Benefit Solutions, 732-428-8272, [email protected]
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SOURCE Clarity Benefit Solutions
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