Short answer: Sometimes. Health FSAs are only COBRA-eligible if the account is underspent at the time of the qualifying event, while dependent care FSAs are not subject to COBRA.
COBRA
COBRA gives employees and their families who lose health benefits the right to choose to continue group health benefits under certain circumstances. COBRA applies to groups with 20 or more employees in the preceding calendar year, but counting employees can be tricky since part-timers count as a fraction of a full-time employee. COBRA has a number of notice requirements along with fines for non-compliance, so some small employers choose to outsource their COBRA administration responsibilities to a Third-Party Administrator (TPA).
What alternatives are available instead of COBRA coverage?
Short answer: Instead of COBRA, you may be able to enroll in Marketplace coverage, a spouse’s or parent’s employer plan, or Medicaid, which can be more affordable depending on your income and eligibility.
Can someone elect COBRA for just one family member?
Short answer: Yes. Each qualified beneficiary can elect COBRA independently, allowing coverage to continue for one family member while others decline.
What benefits do I get under COBRA?
Short answer: COBRA coverage is identical to the employer’s group health plan (same benefits, providers, and rules) because it is a continuation of coverage, not a separate plan.
Can COBRA coverage be dropped early?
Short answer: Yes. COBRA coverage can end before the maximum coverage period if certain events occur, such as missed premium payments, enrollment in other coverage, Medicare entitlement, or termination of the employer’s health plan.
What happens if a COBRA payment is late?
Short answer: COBRA includes a 30-day grace period for monthly premium payments. If payment is not made by the end of that grace period, coverage may be terminated and does not have to be reinstated.
Who is responsible for sending COBRA notices?
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.
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.
Are HRAs a COBRA-eligible benefit?
Short answer: Yes. Most HRAs are considered COBRA-eligible group health plans, meaning employees who experience a qualifying event must be offered the option to continue the HRA through COBRA, with limited exceptions.