COBRA is a federal law that requires employers of 20 or more employees to offer the option of continuing their health coverage to individuals who would otherwise lose their benefits when leaving the company.
It’s important to know the benefits that apply under COBRA and familiarize yourself with instances where COBRA may or may not apply. Don’t let these three COBRA quirks trip you up!
COBRA and Medicare
If an employee retires when Medicare-eligible, they are eligible for COBRA. However be warned when COBRA ends, that individual is not entitled to a separate enrollment period (SEP) and will be subject to Medicare penalties. The takeaway – let those Medicare-eligible employees know if they intend on enrolling in COBRA through the group plan, they should enroll in Part B immediately.
COBRA and Domestic Partnerships
Typically domestic partners do not qualify for COBRA coverage. A COBRA participant or “qualified beneficiary,” includes the employee’s spouse and dependent children. Thus domestic partners do not meet the definition of a qualified beneficiary and are not eligible to be offered COBRA under federal law. However, employers may design a COBRA plan to cover domestic partners. It could be argued that since the plan offers coverage to the domestic partner, they must be given the same right to add their partner to the COBRA coverage (at termination and at open enrollment). Of course, this must be approved by the insurance carrier and the plan should be amended to include domestic partners. The takeaway –if you offer insurance to domestic partners, talk to your carrier about adding domestic partners to the plan when under COBRA.
COBRA and Telemedicine
It’s likely that your stand-alone telemedicine program is subject to COBRA. Telemedicine is considered “medical care” which is defined loosely as professional treatment for illness or injury. Since the goal of the telemedicine program is to provide medical care via phone or video, this telemedicine benefit should be offered along with other COBRA offerings.
If you have a telemedicine program that is bundled or integrated with your medical plan, it will be included in COBRA as part of the medical plan. The takeaway – add your stand-alone telemedicine plan to your COBRA benefits.