What Is Cobra

Continuation Coverage?

Congress passed the landmark Consolidated Omnibus Budget Reconciliation Act (COBRA)1 health benefit provisions in 1986. The law amended the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code and the Public Health Service Act to require most group health plans to provide a temporary continuation of group health coverage that otherwise might be terminated.

Group Health Plans Subject to COBRA

COBRA generally applies to all private-sector group health plans maintained by employers that have at least 20 employees on more than 50 percent of its typical business days in the previous calendar year. Both full- and part-time employees are counted to determine whether a plan is subject to COBRA. Each part-time employee counts as a fraction of a full-time employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full time.

Texas State Continuation

Companies in Texas with less than 20 full-time employees are subject to the State Continuation rules. Most of the insurance companies manage the state continuation process for employers. The support staff of Insurance Connection USA will also assist employers make sure they are in compliance.