Why Is COBRA
www.and How Does it Work for You?
The Consolidated Omnibus Reconciliation Act of 1985 (COBRA) was signed into law on April 7, 1986. The primary intent of Congress was to offer certain individuals, who would otherwise lose their group health coverage due to termination of employment or changes in family status, the right to continue that coverage for a specified period. The cost is paid by the COBRA participant and is equal to the plan premium plus 2%.
The COBRA law requires employers to offer a continuation of group health benefits to individuals who lose coverage as a result of certain qualifying events. The law defines group health benefits as medical insurance, dental insurance vision insurance, prescription drug programs, and health flexible spending accounts. Employers are required to offer individuals who lose coverage as a result of a qualifying event the same coverage they had prior to the event. In addition, qualified beneficiaries - individuals qualifying for continuation coverage - must be given essentially the same rights as active employees with respect to open enrollment periods, changing plans or benefits and adding or deleting dependents, if such rights are afforded to active employees.
The following qualifying events apply to covered employees and their covered dependents:
Voluntary or involuntary termination of employment (except for reasons of gross misconduct)
Reduction in hours of employment
Qualifying events that apply only to covered spouses and dependents of an employees are:
Death of an employee
Divorce or legal separation
Loss of dependent child status as defined under the plan
Employee entitlement to Medicare benefits
Depending on the qualifying event, qualified beneficiaries may continue
their group health coverage for a maximum of:
18 months if the event was a termination or reduction of hours (this period may be extended to 29 months if the qualified beneficiary is or becomes disabled at any time during the first 60 days of COBRA coverage); or
36 months if the event was a death, divorce, legal separation, loss of dependent child status, or entitlement to Medicare.
Benefits as an employee will end on the last day of the biweekly payroll period during which employment ends. Once the pay period is processed, the health plan administrators are given the date that each employee's coverage ends.

If you would like more information please contact
The Lynn Company at:
661-873-2200