While your business is working on benefic compliance, you may need to consider whether you will need to provide COBRA insurance to your employees. This is a federal law that allows some employees to keep their group health plan and to continue their health insurance coverage for a limited amount of time once they lose their job with that company. This gives them some time to still receive health benefits as they look for a new job. But is COBRA insurance something that you need to offer to your employees?

 

In most cases, COBRA is only going to apply to employers who have at least 20 employees. There are some states that make exceptions to this and may require insurers with fewer than 20 employees to still provide this as well. In most situations where you have the right to use COBRA, the employee will get a notice from either the group health plan or the benefits administrator for the employer. This allows the employee to elect into continuation coverage if they need.

 

This coverage is not meant to last forever. You will need to consider how long you are able to provide this to your employees, but it is just there as a bridge after an employee no longer works for the company. It is usually just offered for 18 months, though there are some cases where it can be given for up to 36 months. It will depend on the specific health insurance plan that you have. You can always ask the insurance to see what the exact rules are.

 

The employee will usually have to pay a higher amount for the insurance when they do go on COBRA; they will not get the same pay and amount as they did while working as an employee for you. This will all be outlined on the documents sent to the former employee when they decide to opt into this coverage. You do need to have a rider on your insurance that allows the employee to claim COBRA after they no longer work for you, which may cost a bit more for insurance to start with, but it is up to the employee as well.

 

Depending on the size of your business and how many employees work for you, it may be part of your benefit compliance to provide them with the option to claim COBRA for up to 18 months. Some employees will claim it for less time once they find the new job and others will choose not to claim it at all. As long as you have 20 or more employees, you still need to offer this insurance.