Short answer: Employers must report qualifying events, and plan administrators are responsible for sending COBRA notices. When the employer is also the plan administrator, the election notice must generally be sent within 44 days of the qualifying event.
Compliance
How much does COBRA coverage cost?
Short answer: COBRA generally costs the full premium (the employee share plus the employer share) plus up to a 2% administrative fee, which is why it often feels much more expensive than payroll deductions.
How long does COBRA coverage last?
Short answer: COBRA coverage generally lasts 18 months for job loss or reduced hours and up to 36 months for certain other qualifying events, with limited situations allowing extensions.
What events trigger COBRA eligibility?
Short answer: COBRA eligibility is triggered when a qualifying event, such as job loss, reduced hours, divorce, death of the employee, or a dependent aging out, causes a loss of group health coverage.
What is COBRA coverage and who qualifies for it?
Short answer: COBRA allows certain employees, spouses, and dependents to continue their employer-sponsored group health coverage after a qualifying event causes a loss of coverage, as long as the employer is subject to COBRA.
What’s the definition of a seasonal employee under the ACA?
A seasonal employee works full-time hours for a limited time each year. Employers may exclude them when determining ALE status if they work 120 days or fewer annually.
What is a full-time equivalent (FTE) employee?
An FTE combines part-time employee hours into “full-time equivalents” to determine if an employer is subject to the ACA mandate. 120 part-time hours equals one FTE for this purpose.
What’s the definition of a full-time employee under the ACA?
For ACA purposes, a full-time employee is anyone working at least 30 hours per week or 130 hours per month on average. This threshold triggers employer mandate obligations.
What is an Applicable Large Employer?
An Applicable Large Employer (ALE) is a business with 50 or more full-time and full-time equivalent employees. ALEs must offer health coverage or face possible ACA penalties.
What are the penalties under the ACA’s Employer Mandate in 2025?
Employers may owe $2,900 per full-time employee (4980H(a)) or $4,350 per subsidized employee (4980H(b)) if they fail to offer affordable, minimum value coverage.
What is the Federal Poverty Line safe harbor and how does it work?
The FPL safe harbor sets a fixed monthly max—$113.20 in 2025—for self-only coverage to be considered affordable, making ACA compliance simple and consistent across all employees.
What is the Rate of Pay safe harbor and how does it work?
Employers can meet ACA affordability by ensuring self-only coverage costs no more than 9.02% of an employee’s hourly rate × 130 hours or their monthly salary.
What is the W-2 safe harbor and how does it work?
Employers using the W-2 safe harbor must ensure employee-only coverage costs no more than 9.02% of W-2 Box 1 wages to meet ACA affordability requirements.
What is the affordability percentage under the employer mandate?
For 2025, employee-only coverage is affordable if the cost doesn’t exceed 9.02% of income. Employers can use IRS safe harbors to calculate affordability and avoid penalties.