In the event of a disruption or even an end to the professional relationship between your company and an employee, providing support means ensuring that they can transition to the next chapter of their lives while still retaining the same measure of health insurance coverage and financial security. Fortunately, some employees have access to COBRA, a law uniquely positioned to assist unemployed or qualifying individuals in maintaining their employer’s coverage.
COBRA, or the Consolidated Omnibus Budget Reconciliation Act, is a federal law that allows employees to benefit from their company’s health insurance coverage in the event of circumstances that impact their employment, known as “qualifying events.” This means that, even in the event of job loss or disruption, members can still receive the benefits of their employer’s BCBSIL insurance coverage while they work to help bridge the gap between employment opportunities. This coverage can also extend to a member’s spouse and dependents, similar to conventional insurance coverage.
While this extension of coverage offers a respite to qualifying members, employees opting into small business COBRA coverage are required to pay the whole premium for their coverage, including up to 102% of the plan’s cost, according to the U.S. Department of Labor 
. Due to these increased premiums, employees should weigh the costs and benefits of COBRA coverage before enrolling.
It’s also important to know that COBRA insurance coverage can last up to 18 months for qualifying events related to job loss or a reduction in working hours, while other qualifying events can provide coverage for up to 36 months.
NOTE: COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end. See the next section of this article.
Before small business employers discuss COBRA coverage with their employees, it’s important to understand the qualifying events that allow members to qualify. The most common qualifying events include (but are not limited to):
In addition to qualifying life events, there are several eligibility considerations employees need to keep in mind. For example:
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
It’s also important to note that employees are not required to opt into COBRA coverage after a qualifying event. In fact, employees can opt out of COBRA coverage if they prefer another plan such as those offered through the Affordable Care Act or another short-term medical plan.
Read more about the COBRA eligibility conditions and regulations on the U.S. Department of Labor’s site .
The relationship between small business employers and their employees encompasses more than just meetings and paychecks. By offering COBRA coverage as a supplement to comprehensive BCBSIL health insurance, employers can give their workers a wealth of options to choose from in the event of unforeseen employment circumstances.
As we discussed above, employers do not need to pay any part of COBRA’s premiums, as the employee will be responsible for them. Even though business owners do not necessarily need to factor COBRA coverage into their overall insurance costs, employers should take the time to educate their workforce about their right to small business COBRA coverage and the qualifying events that can make them eligible.
Employers should also be aware that they will need to provide notice following a qualifying event if the employee wishes to take advantage of COBRA coverage. For more information that may help navigate the COBRA process, refer to our Special Enrollment: Qualifying Events and Job Loss page.
Much like standard small business insurance coverage, COBRA gives employees peace of mind even in dire circumstances. We’ve previously discussed how a lack of insurance coverage can negatively impact both employers and employees, so small business owners should consider COBRA coverage as an extra layer of protection for employees going through difficult personal or professional circumstances.
To ensure that employees can properly take advantage of COBRA coverage, small business employers should educate their workforce on the related qualifying events, premium costs and coverage impacts they should expect under COBRA.
To learn more, visit our Special Enrollment page or call 1-833-923-1785.
Material discussed is meant for informational purposes only, and it is not to be construed as medical, financial, tax or legal advice. BCBSIL does not offer medical, financial, tax or legal advice. You are strongly encouraged to seek individualized advice from qualified medical, financial, tax and/or legal experts regarding the best options for your particular circumstances.
