Consolidated Omnibus Budget Reconciliation Act of 1986 is known as COBRA in short. The COBRA is a law passed by the federal government to protect the health insurance coverage of an individual when he/she has lost job or has lost the coverage for some reason. The group health insurance coverage counts as a valuable asset of an employee’s compensation package. An employer, who has a minimum of 20 employees working in his /her organization, is subject to COBRA. The employer must also be providing a group health insurance plan which should entail the following:
• Medical, vision and dental insurances
• HRA or Health Reimbursement Account
• FSA or Flexible Spending Account
• EAP or Employee Assistance Program
• Prescription Drug Benefit Plan
The COBRA benefits apply to the dependent of the employee too, like spouse and children. The reasons of losing health insurance coverage can also be the death of the covered employee, divorce from the covered employee or loss of dependent child status by the son/daughter of the covered employee. COBRA coverage can remain valid for 18 months to 36 months depending on various conditions. For example, if a covered employee quits job, he/she will be entitled to a coverage of18 months, whereas, a covered employee's divorced or legally separated spouse will be entitled to 36 months of COBRA.
However, employers have often complained that the rules of COBRA are quite complex and difficult to understand and follow. If these important set of rules are not followed accordingly, they can lead to unwelcome administrative burdens for the employers. An employer who fails to comply with the rules has to face the penalties by paying up to $110 to every qualified beneficiary, per day.
So understanding the COBRA requirements and complying with the same is a must. In this regard, it must be informed that there are several organizations which offer expert guidance and consultation on COBRA, for the benefit of both the employers and employees. There are online service providers too and all one has to do is, subscribe with them for certain amount and get the answer for every query related to COBRA compliance.
For More Information Please Visit http://www.mycobraplan.com/
