Are you Eligible to Offer Cobra Insurance?

by : premierhrpeo



Through my 25 years of experience in corporate HR, I have learned many things that are now included in the base Policy & Procedure template I use for my Premier HR clients today…Cobra eligibility is one of them.

Offering Cobra insurance upon separation is not a choice or decision made by a business owner, it’s federally regulated by the government. A business must have at least 20 full-time employees in order to be eligible to offer Cobra. Some states offer other programs for companies smaller than 20, but that is a resource determined by each state individually. For instance, I live in Michigan and there is no “mini-cobra” or other continued insurance coverage program offered for companies less than 20.

For business owners, it is wise to document your status with your employees because this may effect whether they choose to opt-in to your insurance plan or not once they become eligible. Being open and honest allows you to maintain a good networking relationship with a departed employee if they don’t feel they have been “duped” out of their insurance coverage.

For employees, this article is meant to alert you of this eligibility issue and determine whether it affects you or not. If you are employed by a company that has less than 20 full-time employees, I suggest you check your individual states continued insurance offerings. Then you can plan accordingly if you are seeking to leave the company voluntarily. You can also make a plan for an involuntary dismissal as well now that you know how it may affect your medical insurance coverage. You know your medical insurance is too important to put in jeopardy, especially since you are subject to pre-existing clauses if there is a 60-63 day break between insurance coverage. There are sources available to shop individual policies, but certainly note that the coverage is not as complete as group plans and is often more expensive…but certainly better than being with out.