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Posted by: Altura Benefits in Insurance
Did you know that, in specific circumstances, employees continue to receive group health insurance coverage after losing their jobs? The Consolidated Omnibus Budget Reconciliation Act — COBRA, for short — is one of the most important pieces of health insurance legislation that impacts your organization. Both state and federal laws determine the requirements for COBRA here in Utah, which makes it a difficult process to understand. This guide helps to clear up the confusion about COBRA insurance in Utah.
In this guide, you will learn the following:
COBRA is a law passed by Congress during the Reagan administration. In the simplest of terms, COBRA stipulates the following:
A person (and his/her dependents) can continue to receive employer-sponsored health insurance after the employee leaves a company or loses his/her job.
Although this is the fundamental principle of COBRA insurance, there are differences between how the federal and Utah governments mandate this legislation.
On the federal level, the following rules apply:
Many businesses think they need to continue to pay the insurance premiums for employees who have left or lost their job, but this isn’t the case. COBRA doesn’t require employers to pay anything.
Simply put, employers must offer COBRA to employees so they can continue to receive group insurance benefits. Employees will need to cover the cost.
There’s another federal rule you need to know:
COBRA premiums are equal to the total cost of the premium under your employer-sponsored health insurance, plus a 2% administration charge.
Utah has a separate COBRA law, COBRA continuation coverage, that mandates additional provisions to the ones above:
As a business owner in Utah, it’s important to understand these distinctions for compliance purposes.
The rules in this section apply to both federal and Utah COBRA insurance recipients (except where stated).
Various events might cause an employee to lose his/her access to your group plan. These “qualifying events” include:
Note: Employees will not qualify for COBRA if fired for gross misconduct.
Employees can have their COBRA coverage terminated in the following circumstances:
COBRA is not always the most financially viable option for your employees. The cost of paying the full price of their insurance premium, plus the admin fee, can often be too much for someone that is out of work. If they choose not to start COBRA coverage or their COBRA reaches the end of its term, they may be eligible for an individual plan and tax credit through the Health Insurance Marketplace (healthcare.gov). To find out more about this alternative, reach out to Altura Benefits today!
To qualify for COBRA, spouses and dependents must have been covered by the employee’s group health plan on the day before a “qualifying event.” Qualified beneficiaries will have days during which each beneficiary may choose COBRA coverage.
An employee’s spouse or dependent is subject to the same rules as the employee, in addition to the conditions below.
An employee’s spouse/dependent forfeits their rights to COBRA if…
When it comes to COBRA insurance in Utah, there are many rules and regulations you must adhere to. However, non-compliance could jeopardize your business and result in penalties. Altura Benefits is the perfect solution, optimizing HR responsibilities and providing employees with the support they require.
Click here to learn more about Altura Benefit’s employee benefits solution.
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