Rules For Determining Whether A Plan Or Employer Is Subject To COBRA

Generally speaking, COBRA is applicable to the group health plan(s) of any employer that employs 20 or more individuals on more than 50% of its typical business days in the preceding year is subject to COBRA.

Specifically speaking, however, the rules and guidelines for determining how the individuals are counted are complex.

These rules include guidance for counting partners, part-time workers, and contractors, determining "typical business days", and examining COBRA eligibility if your organization is a subsidiary of a larger company.

The Basics

Plans and employers with "Group Health Plans" subject to COBRA are covered by a broad definition that includes all types of arrangements for the provision of health care.

This includes any group health plan that is maintained or contributed to by an employer or union-sponsored plan to provide health care to employees, former employees, or the families of such employees or former employees, including:

Traditional indemnity plans
HMOs and PPOs
Specialty plans such as dental, vision, and cancer plans
Employee assistance plans that provide coverage and not simply referrals
Certain on site health care facilities
Health care Flexible Spending Accounts (which meet certain requirements)
Health Reimbursement Arrangements (HRAs)
Supplemental health plans for executives
Some individual plans offered through an employer

The following may also be subject to COBRA:

Controlled group of corporations
Common control partnerships, proprietorships, etc.
Affiliated service groups
Individuals for whom services are performed
As so determined by the Secretary of the Treasury
Any successor to these named individuals

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