An Employee’s Right To COBRA Insurance Coverage

The Consolidated Omnibus Budget Reconciliation Act of 1986, commonly known as “COBRA” mandates continuation of group health insurance coverage in the event of enumerated “qualifying events.” Compliance with COBRA requirements is limited to employers who employ twenty (20) or more employees. These “qualifying events” include quitting or termination of employment. Disqualification from COBRA eligibility may occur if an employee is determined to have committed “gross misconduct” associated with work. However, employees who are terminated for bad performance, inefficiency or reduction in force may continue insurance plan coverage by paying for coverage following receipt of notification of COBRA rights. COBRA coverage is limited to employees not receiving Medicare or other group insurance plan coverage.

The "Qualifying Event" Standard

In addition to the employee’s COBRA rights, a spouse or dependent also has the ability to maintain coverage at that party’s expense following a “qualifying event.” Qualifying events include death, divorce, or legal separation from the covered employee. These COBRA benefits may be available for up to 36 months for a spouse or dependent.

Notification of COBRA Rights

The law requires that employers or plan administrators separately notify all employees and covered spouses and dependents of their right to continued coverage. After receiving such notification, the individual has 60 days to elect to continued coverage. Additionally, employees and dependents whose insurance is protected under COBRA must be provided with any conversion privilege otherwise available in the plan.

The employer is required to provide notice of COBRA rights within 30 days of notice of a “qualifying event.” In addition to actions for damages for losses resulting from failure to provide notice, employers who fail to provide COBRA notice may also be subject to civil penalties per day for each day the employee is not covered. An employee who is denied notice of COBRA rights should set up a consultation with our office to discuss the employee’s rights and determine possible violations by the employer. Obtaining legal counsel may also be necessary if an employer denies COBRA benefits because an employee is alleged to have been terminated for “gross misconduct” or if the employer seeks to have an employee waive his or her COBRA rights.

Contact our Labor and Employment Law Firm

To set up a consultation, please contact the Law Offices of Kevin J. Dolley at (314)645-4100 or by email at kevin@dolleylaw.com. All legal consultations are held strictly confidential. For experienced legal counsel in labor law, employment law and business law matters, please contact the Law Offices of Kevin J. Dolley.