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

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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