COBRA Administration Flowchart

Summary

This flowchart identifies the requirements for administering benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their employer's group health plan for limited periods of time under circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102% of the cost to the plan. The COBRA rules require employers (that sponsor a group health plan) to provide initial notice to employees of their COBRA rights and subsequent notifications. An excise tax will apply for failure to comply. I.R.C. § 4980B.