FAQs

The Consolidated Omnibus Budget Reconciliation Act of 1985, commonly referred to as COBRA, is a federal law that requires employers offering healthcare benefits to offer the option of continuing such coverage to qualified beneficiaries—at their own expense—who would otherwise lose these benefits due to employment termination, reduction in hours or certain other events. COBRA applies to employers with 20 or more employees.

A qualified beneficiary is anyone covered under an employer’s group health plan on the day before an event that causes loss of coverage.

Qualified beneficiaries include:

• Employees, including part-time employees
• Their spouses and dependents
• Retirees (unless they are eligible for Medicare)
• Partners in a partnership

COBRA coverage does not need to be offered to the following individuals:

• An employee who is not yet eligible for the employer’s group health plan
• An eligible employee who declined to participate in the employer’s group health plan
• An individual who is enrolled for benefits under Medicare

Health plan, Flexible Spending Account (FSA) and employee assistance program (EAP) benefits are COBRA eligible. Additional coverage may vary by state.

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) provides qualified beneficiaries the ability to pay premiums and keep the group health insurance plan offered to them by their employer after otherwise losing it due to a reduction in work hours, quitting or losing their job. Those qualified can keep COBRA for 18 to 36 months, depending on individual scenarios. State-specific timeframes may apply. The full cost of the plan, plus up to a 2% administrative fee, needs to be paid by the beneficiary to maintain COBRA coverage.

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) applies to all states. Additionally, state-specific laws may apply and may vary from state to state. When learning more about an individual state’s laws through the state labor agency or legal counsel, employers should ask:

• Which benefit plans are covered?
• Which employers and benefit providers are subject to the law?
• Which employees are eligible to continue benefits under the law?
• Which events trigger continuation coverage (what are “qualifying events”)?
• Which notification requirements do employers need to comply with?
• How long can continuation coverage last? *
• Under what circumstances can coverage be terminated? *

* Updated June 6, 2017

Depending on the type of event, and the qualified beneficiary, COBRA coverage could continue for up to 18 or 36 months after the date of the event or the coverage loss: *

• Termination of employment, or reduction in hours: 18 months
• Qualifying events for reasons other than termination of employment or reduction in hours: 36 months* Federal continuation time frames. State-specific time frames may apply.

When a qualifying event triggers COBRA, in general, any plan offered to employees prior to the qualifying event must be offered. These plans include healthcare, medical spending accounts, vision, dental, prescription drugs, hearing, substance and alcohol abuse and mental health.

COBRA coverage does not extend to life insurance, disability insurance, retirement plans and vacation plans.

Qualifying events that can cause COBRA coverage include:

• An employee’s voluntary or involuntary termination of employment, unless it is for gross misconduct. While COBRA does not define “misconduct,” criteria an employer can use to contemplate denying COBRA benefits due to misconduct include:
• There must be a connection between the offense and the employee’s job
• The employee must be able to understand the gravity of the misconduct
• The offense must be willful
• An employee’s reduction in employment hours (for example, from full-time to part-time)
• A covered spouse’s divorce or legal separation from an employee
• An employee’s death
• An employee’s entitlement to Medicare
• A covered dependent’s change in status (for example, reaching an age that no longer qualifies the dependent for coverage under the parent’s health plan)
• Active military duty when health coverage is not voluntarily maintained
• Failure to return to work at the end of family and medical leave (FMLA) where coverage was in effect at the beginning of the leave but was lost during the leave
• An employer’s bankruptcy

After you quit or lose a job, you may be able to continue receiving your employer-sponsored health insurance coverage for 18 to 36 months—depending on the qualifying event and state-specific laws. However, you will need to pay for the plan’s premium in its entirety, plus up to an additional 2% for administrative costs.

It is important that employers communicate to employees their right for continued benefits once a qualifying event happens.

• Employers must notify covered employees and covered spouses of their initial rights under COBRA when they first join the plan.
• Employers must notify covered persons of their election rights to continue coverage after a qualifying event occurs.
• Employers have 30 days to notify the plan administrator (typically the insurance company) when a qualifying event occurs. In the event of divorce or change of status by a dependent, employers have 60 days. Once notified, the administrator has 14 days to notify the individual entitled to COBRA coverage.

After an employee receives notification from an employer, the employee has 60 days to notify the employer that he or she wants coverage.

The employee generally pays the full cost of COBRA insurance premiums. The law allows the employer to charge 102% of the premium—the extra 2% is meant to cover administrative costs. If an employee receives extended COBRA coverage due to disability, the employer can charge 150% of the premium for months 18 through 29.

Federal law states that COBRA coverage can be terminated if premium payments are late. Payment is considered timely if it is made within 30 days after the due date or within a longer period set out under the plan. The due date must not begin before the first day of the coverage period. Additionally, when an individual chooses to take COBRA coverage, he/she has 45 days to make the first payment.

Most insurers want employers to pay in advance for coverage, and while that can complicate the process, the law states that employers must give individuals receiving COBRA coverage a 30-day grace period from the time the payment is due.

Complying with and adhering to COBRA laws can be challenging and demanding. Fringe Benefit Analysts is here to help.

The Consolidated Omnibus Reconciliation Act of 1985 (COBRA) dictates that former employees can pay the full price of insurance premiums, plus up to 2% in administrative fees, to continue employer-sponsored health insurance plans—for up to 36 months. Individual factors vary, but typically, this means a COBRA premium will cost around four times what you were paying for the same plan as an employee.

Oral health is closely linked to overall health. Dental disease can contribute to cardiovascular disease, respiratory illness, diabetes and other health issues. With regular exams and cleanings, your dentist can help identify warning signs and symptoms of these diseases before they become larger problems that may cost more to remedy.

Dental coverage works in much the same way as medical insurance. You pay a monthly premium and are entitled to certain dental benefits, such as regular checkups, cleanings and x-rays. Some plans include coverage for dental implants, orthodontia and oral surgery.

Dental insurance works slightly different than medical insurance. Rather than covering all costs after a deductible is met, dental insurance typically has a cap on the amount it will cover in a calendar year. However, major dental work can be expensive, and dental insurance can help cover these costs if they arise. Plus, most plans offer coverage known as 100/80/50. This means preventative care, such as X-rays, exams and cleanings, are covered at 100%. And regular checkups are key to avoiding larger, more costly dental problems. Read our Is Dental Insurance Worth It blog for more information.

The cost of dental insurance depends on a number of factors, which may include:

• Your age
• Your gender
• The carrier you choose
• Which dentists you want to visit
• What level of coverage you require
• How high of a deductible you are willing to pay

Contact Fringe Benefit Analysts today for help designing a group or individual dental plan that fits your or your employees’ needs and budgets.

Contact Fringe Benefit Analysts to get quotes and for help signing up for dental coverage through any carrier in our network of partners.

Disability insurance replaces a portion of your income if you’re unable to work due to an injury or illness. Typically, short-term disability covers illnesses, accidental injuries and maternity leave. Long-term disability sometimes will go into effect when short-term leaves off for health issues such as cancer, heart conditions or some types of mental health disorders. There is usually some sort of waiting period before disability payments begin, and they can either be a flat amount selected by the enrollee or a two-thirds percentage of pre-disability income range.

Long- and short-term disability can provide a financial safety net in case of an unanticipated injury or illness. If you’re the primary earner in your household, having this paycheck-protecting insurance in place may be crucial for financial security. According to the Social Security Administration (SSA), 1 in 4 20-year-olds will become disabled for 90 days or more before they turn 67. Disability insurance can provide the income protection needed to get through challenging times. Short-term disability insurance typically covers around 60-70% of your salary and can usually last up to six months. Long-term disability can last five years or longer, depending on the individual scenario, and usually covers 40-60% of your salary—although some policies that you can find cover as much as 70%.

Short-term disability plans have a specified end date—most commonly three months following the date the disability began. Long-term disability plans most commonly cover an individual until they reach normal Social Security retirement age.

If premiums are paid on your behalf by your employer, they are taxable. If you pay your own premiums, the payments are tax-free.

A claim form needs to be completed describing your situation, and why you aren’t able to work in your current role. Your employer will then need to provide supplementary data on pre-disability earnings and duties. Then, your physician will need to provide more detailed information about the severity of your injury or illness.

Own-occupation (also called regular-occupation) disability insurance allows you to claim benefits even if you’re able to earn an income doing something different than your pre-disability job. These plans continue to pay for a specified period—though not expecting you to take the alternative work available.

No. Long-term contracts have residual days built in, giving you the opportunity to attempt to go back to work without risking loss of benefits if not successful.

Short- and long-term disabilities provide income if you’re unable to work due to injury or illness. But these two types cover slightly different health conditions.

Short-term disability insurance may cover:

• Illnesses
• Accidental injury
• Recovering from child birth

Long-term disability insurance may cover:

• Musculoskeletal disorders, such as carpal tunnel syndrome, arthritis and tendonitis
• Connective tissue disorders
• Cancer
• Long-term heart conditions

The cost of disability insurance is typically determined on pre-disability income. However, premiums can vary based on a number of factors, including:

• Your health
• Your occupation
• Benefit period—the amount of time disability insurance will be paid out
• Waiting period—the amount of time you must be disabled before the benefit is payable

Contact Fringe Benefit Analysts for help choosing a paycheck-protecting plan that fits your or your employees’ needs and budgets.

The Family and Medical Leave Act of 1993 (FMLA) gives employees the opportunity to take unpaid leave to care for themselves or family members. The act provides employees the ability to take up to 12 weeks off during a 12-month period to care for themselves or family members. When it comes to benefits, they are treated as if you’re still on the job—provided you continue to pay your share of the premium in certain instances. Additionally, the employee’s position must be held for them upon return.

The Family and Medical Leave Act of 1993 (FMLA) gives qualified employees the opportunity to take unpaid leave for up to 12 weeks off during a 12-month period to care for themselves or family members. Intermittent leave means that an employee can take the given 12 weeks off in blocks, or on a reduced work schedule, rather than all at once. For instance, a qualified employee can take half a day off three days per week for cancer treatment. Any FMLA intermittent leave taken by the employee is deducted from the employee’s 12-week entitlement.

Yes, employers can deny employees protections of the Family and Medical Leave Act of 1993 (FMLA). Here are the most common reasons for denial:

• Employer has less than 50 employees
• You have been employed less than one year
• You have worked less than 1,250 hours in the last 12 months

Applying for the Family and Medical Leave Act of 1993 (FMLA) requires you submit a form to your employer that has been filled out by a medical professional stating that it’s necessary for you to take time off for family or for medical reasons.

The FMLA protections allow employees to take up to 12 weeks off during a 12-month period for certain reasons, which may include:

• Caring for a newborn or adopted child
• Caring for a spouse, child or parent with a serious health condition
• Leave for an employee’s (or their spouse, child or parent’s) military deployment
• Being unable to perform the essential functions of their job due to a serious health condition

You are allowed to be away for up to 12 workweeks in a 12-month period.

You must be working for an FMLA-covered employer and have worked at least 1,250 hours during the 12-month period prior to the start of the covered leave. Paid time off (PTO) is not included to make up these hours. Additionally, you can qualify if you have worked for the FMLA-covered employer for a total of 12 months within the prior seven years.

All public agencies and schools are subject to FMLA. Private employers with at least 50 employees working at least 20 workweeks are also subject to FMLA. However, these private company employees must work at a location with 50 or more employees within a 75-mile radius. This is commonly known as the 50/75 rule.