Who Is Eligible for Cobra Coverage?
COBRA provides a safety net for many that are no longer employed. According to the United States Department of Labor, the Consolidated Omnibus Budget Reconciliation Act (COBRA) provides the right for individuals who experience a qualifying event to be given an opportunity to temporarily retain their health insurance coverage.
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Employer Guidelines
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Employers that hired 20 or more employees on more than fifty percent of the company's days of operation in the prior calendar year must comply with COBRA's continuation of coverage guidelines. Employers that do not meet the employee threshold may claim a small-business exemption. This is covered further by Ira M. Golub and Roberta K. Chevlowe in their book "COBRA Handbook 2009."
Qualifying Event
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An event that would cause a qualified beneficiary to lose their employer-sponsored health coverage is considered a qualifying event. A different set of events can trigger COBRA eligibility for each of the qualified beneficiary groups.
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Qualified Beneficiary
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An employee, employee's spouse or employee's dependent child who is covered by the employer's group health plan on the day prior to a defined qualifying event is considered to be a qualified beneficiary. .
Employee Beneficiary
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An employee is eligible for COBRA in the event of a voluntary or involuntary termination that is not the result of misconduct. A reduction in the number of work hours can also trigger eligibility.
Spouse Beneficiary
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Employee events will trigger a spouse's eligibility. The spouse's eligibility is also triggered when the employee becomes eligible for Medicare, if there is a divorce or legal separation or if the employee dies.
Dependent Child Beneficiary
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The events that trigger the spouse's COBRA eligibility will also trigger the dependent child's eligibility. Eligibility is also triggered when the child no longer meets the dependent child criteria.
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