What the employee should know about COBRA in order to protect himself, his family and friends

Information may not be reliable

A person who has been fired from his job asks: What is COBRA? And what are my rights, and what are my options. 1986 was the year Congress passed landmark Consolidated Omnibus Budget Reconciliation Act, (COBRA) to provide health benefits. First, COBRA is not available to employees and their dependents if there are more than 20 employees. If an employee isn’t a full-time employee, the employer cannot legally keep him or her on the insurance plan. Unless the employee has been disabled, the employee and his dependents may only remain on the former employer’s plan for 18 months. The employee can continue on the plan up to 29 month if he or she is disabled. Employee death, legal separation or divorce, or if the spouse is entitled to Medicare, the spouse or dependent children can receive 36 months of coverage. In the event that a dependent child loses his or her dependent child status, he/she would also be eligible to continue coverage for 36 more months. cobra subsidy update

COBRA is not a good option if you become ill while you are on the plan. You may not be eligible for the individual plan you choose. If you are considered disabled, your employer may charge up to 102% on his regular COBRA costs and upto 150% of the previous 11 months. It seems absurd, but this is the reality. COBRA can often be more expensive than an individual policy, but if there is a 62-day lapse in coverage you don’t have to wait for any preexisting conditions. A preexisting condition that has been covered for more than 62 consecutive days will be subject to a one-year wait. You must decide within 60 calendar days of the qualifying events if you wish to receive COBRA coverage. After you select to accept the coverage, you will have 45 days for your first payment. The qualifying event must receive payment. This payment can be made back to the qualifying event within 90 days. COBRA does NOT cover life insurance benefits. This is just an overview of COBRA. For more information, contact your employer. Your employer is required to give you information on a timely manner or face severe penalties.

What are the penalties for violating TAMRA? While the IRS COBRA penalties are not as severe now as they were before TAMRA, they are still very serious. An excise penalty of $100 per day may be paid by the emplorer, but $200 per family is allowed if a family member is involved.

How much can penalties be imposed? The penalties could be as high at $2500 per beneficiary if the employer fails to comply. An employer could face a penalty up to $15,000. An employer can only be taxed up to $500,000 in any given year or 10% of the costs for the previous year. american rescue plan act