group health plans subject to cobra

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Learn about COBRA insurance and how to get coverage

COBRA, the Consolidated Omnibus Budget Reconciliation Act, lets qualified workers keep their group health insurance for a limited time after a change in eligibility.

Learn how COBRA works

COBRA applies to most private sector businesses with 20 or more employees. It requires an employer's group health insurance plan to continue after qualifying life events. These include:

  • Termination or a reduction of a covered employee's hours
  • Divorce or legal separation from a covered employee
  • Death of a covered employee
  • Medicare eligibility for a covered employee
  • Loss of a child's or dependent's health insurance coverage under the plan

Qualified beneficiaries under COBRA include:

  • An employee
  • Former spouses
  • Dependent children

Find out if you are eligible for COBRA

Three basic requirements must be met for you to be able to elect to continue coverage under COBRA:

  • Your group health plan must be covered by COBRA.
  • A qualifying event must occur.
  • You must be a qualified beneficiary for that event.

How to get COBRA coverage

When a qualifying life event happens, you or your employer will notify the health plan. The plan will send an election notice that you will have 60 days to respond to. If you elect to take COBRA coverage, your employer may pay a portion of or the full amount of your insurance premium.

To get more information about COBRA benefits, read this publication from the U.S. Department of Labor (DOL).

LAST UPDATED: December 6, 2023

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U.S. Dept. of Health & Human Services

COBRA Continuation Coverage Questions and Answers

Guidance for FAQs that address COBRA continuation coverage, with a focus on public sector COBRA.

Issued by: Centers for Medicare & Medicaid Services (CMS)

Issue Date: May 07, 2013

Q1: What is COBRA continuation coverage?

The Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) amended the Public Health Service Act, the Internal Revenue Code and the Employee Retirement Income Security Act (ERISA) to require employers with 20 or more employees to provide temporary continuation of group health coverage in certain situations where it would otherwise be terminated.

Q2: What is public sector COBRA?

Title XXII of the Public Health Service (PHS) Act, 42 U.S.C. §§ 300bb-1 through 300bb-8, applies COBRA requirements to group health plans that are sponsored by state or local government employers.  It is sometimes referred to as “public sector” COBRA to distinguish it from the ERISA and Internal Revenue Code requirements that apply to private employers.  

Q3: Who has jurisdiction with respect to public sector COBRA?

The U.S. Department of Health and Human Services, through the Centers for Medicare & Medicaid Services (CMS) has jurisdiction with respect to the COBRA continuation coverage requirements of the PHS Act that apply to state and local government employers, including counties, municipalities and public school districts, and the group health plans that they sponsor.

Q4: What is a qualified beneficiary?

A qualified beneficiary is an individual who is entitled to COBRA continuation coverage because he or she was covered by a group health plan on the day before a “qualifying event.”  Depending on the circumstances, the following individuals may be qualified beneficiaries: a "covered employee" (a term that includes active employees, terminated employees and retirees); a covered employee's spouse and dependent children; any child born to or placed for adoption with a covered employee during the period of COBRA coverage; agents; self-employed individuals; independent contractors and their employees; directors of the employer; and, for public sector group health plans, political appointees and elected officials.

Q5: What is a qualifying event?

Qualifying events are certain events that would cause an individual to lose health coverage under a group health plan.    The type of qualifying event will determine who the qualified beneficiaries are and how long they will be entitled to COBRA coverage.

Q6: What are some examples of qualifying events?

The following are qualifying events: the death of the covered employee; a covered employee's termination of employment or reduction of the hours of employment; the covered employee becoming entitled to Medicare; divorce or legal separation  from the covered employee; or a dependent child ceasing to be a dependent under the generally applicable requirements of the plan.

Q7: How long does COBRA last?

Assuming one pays all required premiums, COBRA coverage starts on the date of the qualifying event, and the length of the period of COBRA coverage will depend on the type of qualifying event which caused the qualified beneficiary to lose group health plan coverage.

For “covered employees,” the only qualifying event is termination of employment (whether the termination is voluntary or involuntary) including by retirement, or reduction of employment hours.  In that case, COBRA lasts for eighteen months.

If the qualifying event is the death of the covered employee, divorce or legal separation of the covered employee from the covered employee’s spouse, or the covered employee becoming entitled to Medicare, COBRA for the spouse or dependent child lasts for  36 months.     

Q8: How is COBRA affected if I am disabled?

In certain circumstances, if a disabled individual  and non-disabled family members are qualified beneficiaries, they are eligible for up to an 11-month extension of COBRA continuation coverage, for a total of 29 months.  The criteria for this 11-month disability extension is a complex area of COBRA law.  We provide general information below, but if you have any questions regarding your disability and public sector COBRA, we encourage you to email us at [email protected].

In general, the COBRA qualifying event must be a termination of employment or a reduction of the covered employee’s employment hours.  Second, the covered employee must be determined under title II or title XVI of the Social Security Act to be disabled.  Third, the individual must be disabled at some time during the first 60 days of COBRA continuation coverage, regardless of whether the disability started prior to or during that period.  Fourth, while the disability must begin within the first 60 days of COBRA coverage, the determination under title II or XVI can be issued any time during the 18-month period of COBRA coverage that began with the qualifying event.  Finally, the covered employee must generally notify the plan administrator about the disability determination within 60 days after the date the disability determination is issued, but in no case later than the end of the 18-month period of continuation coverage that applies to the qualifying event.  In addition, the extended period of COBRA ends if there is a final determination under title II or XVI that the individual is no longer disabled.

Note that the group health plan is permitted to charge up to 150 percent of the applicable premium for the 11-month extension.

Q10: What notification requirements apply when there is  a qualifying event?

Separate requirements apply to the employer and the group health plan administrator.  An employer that is subject to COBRA requirements is required to notify its group health plan administrator within 30 days after an employee’s employment is terminated, or  employment hours are reduced.  Within 14 days of that notification, the plan administrator is required to notify the individual of his or her COBRA rights.  If the employer also is the plan administrator and issues COBRA notices directly, the employer has the entire 44-day period in which to issue a COBRA election notice.

Q11: When do I have an obligation to notify my plan administrator that I have had a qualifying event?  

If you become divorced or legally separated from the covered employee, or if a dependent child no longer meets the requirement to be a covered dependent (usually by reaching a specified age), the covered employee or qualified beneficiary is responsible for notifying the plan administrator of the qualifying event within 60 days after the date of the qualifying event.

Q12: What is the next step in the process once appropriate notice of a qualifying event is given to the health plan administrator?

Plan administrators that receive notice of a qualifying event must notify qualified beneficiaries of their right to elect COBRA coverage.  Qualified beneficiaries have independent election rights, and therefore they must each be notified.  If all the qualified beneficiaries reside at the same address, the plan administrators may either include separate election notices for each qualified beneficiary in a single mailing that is addressed to both the employee and spouse, or send a single notice that  clearly identifies all qualified beneficiaries covered by the notice, and explains each person's separate and independent right to elect COBRA continuation coverage.  Each qualified beneficiary then has 60 days to decide whether to elect continuation coverage.

If the plan administrator knows that there are qualified beneficiaries who do not live at the same address, and knows their addresses, separate election notices must be sent to those qualified beneficiaries.  A notice sent to the spouse is treated as a notification to all qualified dependent children residing with the spouse at the time the spouse's notification is sent by the plan administrator.  Notices must be provided in person or by first mail.

Q13: What does a COBRA election notice include?

A notice of COBRA rights generally includes the following information:

  • A written explanation of the procedures for electing COBRA,
  • The date by which the election must be made,
  • How to notify the plan administrator of the election,
  • The date COBRA coverage will begin,
  • The maximum period of continuation coverage,
  • The monthly premium amount,
  • The due date for the monthly payments,
  • Any applicable premium amount due for a retroactive period of coverage,
  • The address to which to send premium payments,
  • A qualified beneficiary’s rights and obligations with respect to extensions of  COBRA coverage, and
  • The bases for early termination of the period of  COBRA coverage.

Q14: How do I elect COBRA?

Qualified beneficiaries must notify the plan administer of their election according to the instructions laid out in the election notice.  Qualified beneficiaries must be given an election period of at least 60 days during which each qualified beneficiary may choose whether to elect COBRA coverage.  This period is measured from the later of the date of the qualifying event or the date the COBRA election notice is provided.  COBRA coverage is retroactive if elected and paid for by the qualified beneficiary.

Q15: Where do I send my COBRA payments?

The COBRA election notice should contain the address to which premium payments should be sent and should be provided by the employer or group health plan administrator along with the amount of the premium due and its due date.

Q16: How long do I have before I have to submit my first COBRA payment?

A group health plan cannot require payment for any period of COBRA continuation coverage earlier than 45 days after the day on which the qualified beneficiary made the initial election for continuation coverage.

Q17: Once the first payment is made, when do I have to submit payments for all future COBRA premiums?

Not including the first premium payments, all other premium payments must be made within 30 days of the due date (due date is set by the group health plan).

Q18: How is COBRA coverage computed and how much will I pay?

Usually the beneficiary is required to pay the entire cost of COBRA coverage, although a few employers choose to subsidize COBRA.  However, in the likely event that the employer chooses not to subsidize COBRA, the COBRA premium cannot exceed 100 percent of the cost of the group health plan for similarly situated individuals who have not incurred a qualifying event, including both the portion paid by employees and any portion paid by the employer prior to the qualifying event, plus an additional 2 percent for administrative costs.  Please note the employer may charge up to 150 percent for an 11 month disability extension of COBRA coverage.

General note: COBRA can be a daunting and complex area of Federal law.  If you have any questions or issues regarding public sector COBRA we encourage you to email us at [email protected] .

HHS is committed to making its websites and documents accessible to the widest possible audience, including individuals with disabilities. We are in the process of retroactively making some documents accessible. If you need assistance accessing an accessible version of this document, please reach out to the [email protected] .

DISCLAIMER: The contents of this database lack the force and effect of law, except as authorized by law (including Medicare Advantage Rate Announcements and Advance Notices) or as specifically incorporated into a contract. The Department may not cite, use, or rely on any guidance that is not posted on the guidance repository, except to establish historical facts.

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When an Employee Assistance Program is Subject to COBRA

May 30, 2019

COBRA and Employee Assistance Program (EAP) compliance can be frustrating and complex. Certain elements must be present for an EAP to be considered a COBRA-covered benefit. Plan sponsors should take care in determining which plans are subject to COBRA and comply accordingly.  

The critical issue is whether the EAP provides medical care. In general, COBRA applies to group health plans that provide medical care or healthcare. If the EAP provides employees (and spouses, if eligible under the EAP) coverage for licensed health providers that assist in diagnosing and prescribing treatment related to the individual’s health condition, then the plan is likely subject to COBRA.

If the EAP is staffed with trained counselors (whether internally or through an outside service provider) who actually provide the counseling, the EAP will most likely be considered a group health plan and will be subject to COBRA. This is true regardless of whether the employer pays the full EAP premium for active employees.         

In contrast, if the EAP is staffed with non-trained persons who simply provide referrals to employees in need of counseling or medical treatment, then the EAP may not be subject to COBRA

EAPs typically also provide other non-healthcare benefits (i.e., financial or legal counseling). Those non-medical benefits should be taken out when calculating the COBRA premium and coverage.

Employers must determine what other health benefits are offered at open enrollment to a qualified beneficiary whose only coverage at the time of the qualifying event was the EAP. If a qualified beneficiary wasn’t eligible for other group health plan coverage at the time of the qualifying event, presumably only the EAP need be offered at open enrollment. But if the employee was eligible for (but not enrolled in) other group health plan coverage at the time of the qualifying event, then they must be given the opportunity to elect such coverage at open enrollment.

Some employers avoid administrative complexity by arranging with EAP carriers to extend coverage for 36 months beyond the qualifying event occurrence. This way, there is no loss of coverage during the maximum COBRA continuation period and COBRA compliance is greatly simplified. Other employers limit EAP eligibility to employees who are eligible for the group health plan and wrap the EAP into the COBRA election for the group health plan.

Neither approach is ideal. In the first, the employer is providing continued EAP coverage to individuals who potentially have a tenuous relationship to the employer. In the second, the employer is depriving non-benefit eligible employees access to the EAP when this group may most benefit from access.

In summary, if the EAP is found to be providing medical care, it is treated as any other benefit subject to COBRA. EAPs typically cover all employees, so complying with COBRA means sending initial and election notices to a broad population. Coverage would need to be offered to those covered on the day before the qualifying event (including divorced spouses, if applicable) and coverage may be continued for the full applicable COBRA coverage period (i.e., 18, 29 or 36 months). The employer may charge up to 102% of the cost.

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Is an employee assistance program (EAP) subject to COBRA? Is it considered an excepted benefit under the PPACA?

An  employee assistance program (EAP) is subject to COBRA if it meets the definition of a group health plan. COBRA defines a group health plan as a plan that the employer maintains or supports and which provides some type of medical care. The law generally applies to all group health plans maintained by private-sector employers with 20 or more employees, or by state or local governments. The law does not apply to plans sponsored by the federal government or by churches and certain church-related organizations. In addition, many states have laws similar to COBRA (sometimes called mini-COBRA), including those that apply to health insurers of employers with fewer than 20 employees. Information on these mini-COBRA laws is available from a state's insurance department.

The employer does not have to contribute any funding to an EAP for it to be considered an employer-sponsored health plan. However, if the EAP is just a referral service, it would not be considered a group health plan and would not be subject to COBRA. For example, an employee who exhibited a dramatic change in behavior is referred to the company's EAP. The employee uses the EAP hotline and engages in a discussion with a psychologist who schedules an appointment with her. In this scenario, the company's EAP meets the criteria of an employer-sponsored health plan because the employee is receiving counseling from a trained professional. If, however, the EAP hotline only gave the employee a list of psychologists in her area, it would not meet the criteria for a health plan.

The Patient Protection and Affordable Care Act (PPACA, or ACA) also addresses the issue of whether an EAP is a group health plan or is an "excepted benefit" in that it does not provide significant medical care and is therefore exempt from most of the ACA rules. The Departments of Treasury, Labor, and Health and Human Services, which are responsible for implementing the ACA, have issued final regulations that set forth criteria for when an EAP would not be considered a group health plan and, therefore, would not be subject to the ACA's group health plan mandates.

Under the regulations, an EAP would not be subject to the ACA's group health plan mandates provided it satisfies the following requirements:

  • It does not provide "significant" medical care benefits.
  • The benefits under the EAP cannot be coordinated with benefits under another group health plan. For example, participants in the other group health plan must not be required to exhaust benefits under the EAP (e.g., a gatekeeper EAP) before an individual is eligible for benefits under the other group health plan.
  • No employee premiums or contributions may be required as a condition of participation in the EAP.
  • There is no cost-sharing for benefits provided through the EAP.

An employer that sponsors an EAP should use the above criteria to determine whether its EAP is in fact an excepted benefit under the ACA. 

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06 Nov Workplace Wellness Programs – ERISA, COBRA and HIPAA

Applicable Laws

Wellness programs that provide medical care must comply with:

  • HIPAA privacy and security rules

Examples of Medical Care

  • Biometric screenings
  • Immunizations
  • Physical examinations
  • Counseling services

Links and Resources

  • Department of Labor (DOL) website  on ERISA health plans and benefits
  • An Employer’s Guide to Group Health Continuation Coverage Under COBRA  – A DOL resource for employers
  • The Department of Health and Human Services’ (HHS) website  on the HIPAA privacy rule

A workplace wellness program may be subject to a number of different federal laws, depending on how the program is structured. An employer’s wellness program that provides medical care (for example, biometric screenings) is generally subject to ERISA, COBRA and the HIPAA privacy and security rules. These laws require employers to:

  • Explain the wellness program’s terms in a summary plan description (SPD) ;
  • Provide qualified beneficiaries with the opportunity to elect COBRA coverage  after experiencing a qualifying event; and
  • Protect the individually identifiable health information  collected from or created about participants in the wellness program.

To simplify their compliance obligations, employers often incorporate their wellness programs into their group health plans. This would allow them, for example, to include the wellness program in the group health plan’s SPD.

Wellness program design

As employers look for ways to control health care costs, many consider workplace wellness programs. Workplace wellness programs can encourage employees to make lifestyle changes to improve their health or adhere to a particular course of treatment.

Workplace wellness programs can take a variety of different forms—for example, some programs offer only educational services, while other programs offer gym memberships, biometric testing and health counseling. Wellness programs often incorporate incentives or rewards to encourage employee participation, such as gift cards, free or discounted gym memberships, or reductions in group health plan premiums.

There are a number of federal nondiscrimination rules that should be considered when designing a wellness program, such as those in HIPAA, the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). These laws, for example, may limit the maximum reward offered by the wellness program.

In addition, employers should evaluate how sponsoring a wellness program impacts their compliance obligations under the HIPAA privacy and security rules and other federal laws, such as ERISA and COBRA.

ERISA sets minimum standards for employee benefit plans maintained by private-sector employers. ERISA exempts only two types of employers from its requirements— governmental and church employers.

Many plans or programs that provide benefits to employees are considered employee benefit plans that are subject to ERISA. In order for a wellness program to be considered an ERISA-covered employee benefit plan, it must satisfy all of the following requirements:

group health plans subject to cobra

Wellness Programs – Medical Care

In general, a wellness program’s status as an ERISA-covered benefit depends on the services or care provided by the program.  If a wellness program provides medical care, it will be considered a group health plan subject to ERISA.  

Wellness programs that include the following services are considered ERISA plans because they provide medical care:

  • Counseling services from trained professionals;
  • Physical examinations;
  • Biometric screenings (for example, blood pressure or cholesterol screenings); or
  • Flu shots or other immunizations.

However, wellness programs that only consist of educational services or merely encourage healthy living habits (for example, healthy cooking classes or exercise programs) do not provide medical care, and are not covered by ERISA.

ERISA Compliance

Under ERISA, employers are required to take the following steps with respect to their employee benefit plans:

  • Adopt an official plan document  that describes the plan’s terms and operations;
  • Explain the plan’s terms and rules to participants through an SPD ;
  • File an annual report ( Form 5500 ) for the plan, unless a filing exemption applies;
  • Comply with certain fiduciary standards of conduct  with respect to the plan; and
  • Establish a claims and appeals process  for participants to receive benefits from the plan.

Compliance Tip: When a wellness program is offered as part of a group health plan, employers should confirm that it is described in the health plan’s ERISA documentation, such as the plan document and SPD.

COBRA requires covered group health plans to offer continuation coverage to employees, spouses and dependent children when group health coverage would otherwise be lost due to certain specific events, called qualifying events. COBRA generally applies to group health plans maintained by private-sector employers that had at least  20 employees  on more than 50 percent of typical business days in the previous calendar year.

COBRA does not apply to group health plans maintained by small employers (those with fewer than 20 employees) or churches. There are also special coverage rules for government employers, although, as a practical matter, most government group health plans are required to offer continuation coverage.

Wellness Program – Medical Care

A wellness program that provides  medical care  is considered a  group health plan that is subject to COBRA , unless the employer sponsoring the program qualifies for the exemption for small employers or churches.

“Medical care” broadly refers to the diagnosis, cure, mitigation and prevention of disease and includes wellness services such as physical examinations, biometric screenings, counseling services and flu shots or other immunizations.

COBRA Compliance

If a wellness program is subject to COBRA, qualified beneficiaries must be given the opportunity to elect COBRA coverage for the program after experiencing a qualifying event (for example, a termination of employment). Certain notices must also be provided to plan participants, including an initial notice when participation begins and an election notice after a qualifying event occurs.

Offering Cobra

Employers often bundle their wellness programs with their group health plans, so that only employees who participate in the group health plan are eligible for the wellness program. In these cases, the employer may design its COBRA practices so that only qualified beneficiaries who elect COBRA coverage for the group health plan are eligible to continue coverage under the wellness program.

However, if the wellness program is offered to all employees, including those who are not enrolled in the employer’s group health plan, COBRA coverage for the wellness program must be offered separately. This may increase the risk to the employer because individuals who elect COBRA for the wellness program have the same open enrollment and HIPAA special enrollment rights as similarly situated active employees.

Compliance Tip: Employers with wellness programs that are group health plans should review their COBRA policies and notices to make sure they include the wellness program.

COBRA Premium

In general, the maximum COBRA premium is 102 percent of the cost to the plan for similarly situated beneficiaries who have not experienced a qualifying event. In calculating premiums for continuation coverage, a plan can include the costs paid by both the employee and the employer, plus an additional 2 percent for administrative costs.

Unfortunately, the IRS has not issued much guidance on calculating COBRA premiums and has not specifically addressed how to calculate the premium for a wellness program. However, plan sponsors are expected to calculate COBRA premiums “in good faith compliance with a reasonable interpretation” of COBRA’s requirements.

Employers may offer premium discounts as a wellness program reward. An employer’s premium discount does not affect the COBRA premium because the cost to the plan for purposes of setting COBRA premiums combines the cost to both the employer and employee.

Compliance Tip: If an employer charges a COBRA premium for wellness program coverage, the cost of the coverage must be included in the aggregate cost of employer-sponsored health coverage on employees’ Form W-2. Currently, this reporting requirement only applies to employers that file 250 or more Forms W-2 for a year.

HIPAA Privacy and Security Rules

The HIPAA privacy and security rules protect individuals’ identifiable health information—called protected health information (or PHI)—held by covered entities or their business associates. Health plans are a type of covered entity.

Wellness programs that provide medical care (for example, biometric screenings) are generally considered health plans that are subject to HIPAA’s privacy and security rules. Wellness programs offered as part of a health plan are also subject to the HIPAA rules. For example, a wellness program is considered part of a group health plan when an employer offers incentives or rewards related to group health plan benefits, such as reductions in premiums or cost-sharing amounts, in exchange for participation in the program.

There is a  narrow exemption for certain small, self-funded health plans . Under this exemption, a wellness program with fewer than 50 eligible employees that is administered by the employer that sponsors the program is exempt from the HIPAA rules.

HHS issued  frequently asked questions (FAQs)  that address the applicability of the HIPAA privacy and security rules to workplace wellness programs. According to these FAQs:

  • Where a wellness program is offered as part of a group health plan , the individually identifiable health information collected from or created about participants in the wellness program is PHI and protected by the HIPAA rules. HIPAA also protects PHI that is held by the employer as plan sponsor on the plan’s behalf when the plan sponsor is administering aspects of the plan, including wellness program benefits offered through the plan.
  • Where a workplace wellness program is offered by an employer directly and not as part of a group health plan , the health information that is collected from employees by the employer is not protected by the HIPAA rules. However, other federal or state laws may apply and regulate the collection and use of the information.

The HIPAA privacy and security rules restrict the circumstances under which a group health plan may allow an employer as plan sponsor access to PHI, including PHI about participants in a wellness program offered through the plan, without the written authorization of the individual.

Often, the employer as plan sponsor will be involved in administering certain aspects of the group health plan, which may include administering wellness program benefits offered through the plan. Where this is the case, and absent written authorization from the individual to disclose the information, the group health plan may provide the employer as plan sponsor with access to the PHI necessary to perform its plan administration functions, but only if the employer as plan sponsor amends the plan documents and certifies to the group health plan that it agrees to, among other things:

  • Establish adequate separation between employees who perform plan administration functions and those who do not;
  • Not use or disclose PHI for employment-related actions or other purposes not permitted by the privacy rule;
  • Where electronic PHI is involved, implement reasonable and appropriate administrative, technical and physical safeguards to protect the information, including by ensuring that there are firewalls or other security measures in place to support the required separation between plan administration and employment functions; and
  • Report to the group health plan any unauthorized use or disclosure, or other security incident, of which it becomes aware.

Employers that sponsor fully insured medical plans often do not perform plan administration functions on behalf of the group health plan. These employers have limited compliance responsibilities under the HIPAA rules if the information they receive from the health insurance issuer or health plan is limited to enrollment information and summary health information (if requested for purposes of modifying the plan or obtaining premium bids for coverage under the plan). However, sponsoring a self-funded or self-administered wellness program may subject the employer to additional HIPAA compliance requirements, unless the program qualifies for the exemption for small plans.

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COBRA for the Health FSA

By Brian Gilmore | Published May 8, 2023

group health plans subject to cobra

Question: What are the special COBRA rules that apply to the health FSA?

Short Answer: The health FSA is a group health plan subject to COBRA.  However, COBRA coverage is available only for underspent accounts and only through the end of the plan year of the qualifying event.  The exception is where the health FSA offers the carryover, COBRA continues to be available for the full (typically 18-month) maximum coverage period.

General Rule: COBRA Applies to Group Health Plans

Individuals have the right to continue group health plan coverage through COBRA upon experiencing a COBRA “qualifying event,” which is a loss of coverage triggered by one of the prescribed COBRA triggering events (e.g., termination of employment).  Individuals who experience a COBRA qualifying event are referred to as “qualified beneficiaries”. Group health plans subject to COBRA include medical, dental, vision, health FSA, HRA, most EAPs, and certain wellness programs and on-site medical clinics.

For more details: Newfront COBRA for Employers Guide

Run-Out Period to Submit Health FSA Claims Incurred Pre-Termination

The health FSA is a component of the employer’s Section 125 cafeteria plan.  Most cafeteria plans will provide that FSA coverage (i.e., the ability to incur reimbursable claims) ends as of the date of termination from employment or other event causing a loss of eligibility, such as reduction in hours. 

The cafeteria plan may provide that health FSA coverage continues through the end of the month in which the employee terminates, similar to many medical/dental/vision plans. However, extending health FSA coverage through the end of the month prior to starting the run-out period is not common. 

Upon loss of coverage, most health FSAs will offer a run-out period for employees to submit claims incurred prior to termination.  The run-out period is a plan design matter set by the plan terms, but it is typically a maximum of 90 days.

For more details: Newfront Section 125 Cafeteria Plan Guide

Adrian works at J&M Tropical Fish and enrolls in the company’s health FSA with a $1,000 election.

She terminates mid-year on the last day of June after having received $200 in reimbursement.

At the time of termination, Adrian has $150 in receipts for eligible medical expenses that she has not yet submitted.

The J&M Tropical Fish health FSA provides a 90-day run-out period for mid-year terminations.

Adrian can submit her $150 outstanding receipts for reimbursement as valid health FSA claims during the 90-day run-out period (i.e., by September 29).

Absent a COBRA election, she cannot incur new reimbursable expenses from July forward.

COBRA for Health FSA Applies Where Account is Underspent

COBRA is different from the plan’s run-out period because it permits the employee to continue to incur reimbursable claims.  In other words, the employee will remain “covered” by the health FSA post-termination.  The run-out period, on the other hand, merely permits employees to submit claims for eligible §213(d) medical items or services that were incurred prior to termination of health FSA coverage.

For more details: When FSA Expenses Are Incurred

Employees are eligible to continue health FSA coverage through COBRA only if their account is underspent at the time of the qualifying event, such as termination of employment.  The health FSA is underspent if the employee has contributed more to the health FSA than has been reimbursed at the time of the event.

 By timely electing and paying for COBRA, the employee will have access to the remaining balance in the FSA (i.e., the amount elected reduced by claims reimbursed prior to the qualifying event).

Paulie works at Shamrock Meats and enrolls in the company’s health FSA with a $1,000 election.

He terminates mid-year on the last day of June after having contributed $500 but received only $200 in reimbursement.

At the time of termination, Paulie has no unsubmitted receipts for eligible medical expenses.

Paulie’s account is underspent at the time of the termination because he has contributed more ($500) than he had received in reimbursement ($200).

He has therefore experienced a COBRA qualifying event that permits him to continue health FSA coverage through COBRA.

If Paulie timely elects and pays for COBRA for the Shamrock Meats health FSA, he can continue incurring reimbursable expenses during the period of COBRA continuation coverage.

Paulie will have access to the $800 remaining balance in the health FSA ($1,000 election reduced by $200 reimbursed prior to qualifying event) through COBRA.

COBRA for Health FSA Maximum Coverage Period Limited to Current Plan Year

The general COBRA rule is that a loss of coverage caused by termination of employment or reduction of hours is a qualifying event giving rise to an 18-month maximum coverage period.  However, special health FSA rules generally limit the COBRA maximum coverage period to only the remainder of the plan year in which the qualifying event occurs.

Same as Example 2 above.

The Shamrock Meats health FSA does not offer a carryover.

Paulie timely elects and pays for COBRA to continue health FSA coverage.

Paulie can continue to incur reimbursable claims under the health FSA for the remainder of the plan year (through December) if he continues to timely pay the required premium.

He will not have access to the health FSA in the following year.

Exception: COBRA Applies to Health FSA Carryover for Full Maximum Coverage Period

Health FSAs may offer a carryover provision that permit employees to access up to $500 (indexed at 20% of the maximum employee salary reduction contribution for the plan year) of unused amounts in the subsequent plan year.  For carryovers from a plan year starting in 2023 to a plan year beginning in 2024, the carryover limit is $610 (20% of $3,050).  The carryover is an optional plan provision.  A Health FSA offering the carryover cannot also offer the grace period.

For more details:

The $500 Carryover vs. the Grace Period

2023 Health FSA Limit Increase to $3,050

Where the health FSA offers a carryover provision, IRS guidance confirms that employees can continue coverage through COBRA into the subsequent plan year to access unused amounts that carry over.  Employees will have access to the carryover balance until the end of the COBRA maximum coverage period, which is 18 months for a qualifying event triggered by a termination from employment.

Duke works for Delphi Boxing Academy and enrolls in the company’s health FSA with a $1,000 election.

He terminates mid-year on the last day of June after having contributed $500 but received only $200 in reimbursement. 

The Delphi Boxing Academy health FSA offers the carryover provision.

Duke’s account is underspent at the time of the termination because he had contributed more ($500) than he had received in reimbursement ($200).

Duke timely elects and pays for COBRA coverage through the plan year ending December 31, 2023.

As of the end of the plan year, he has not incurred any further reimbursable claims and therefore has a remaining balance in his account of $800.

$610 of that remaining balance carries over into the 2024 Delphi Boxing Academy health FSA plan year (he forfeits the remaining $190).

Duke will have access to the $610 carryover amount for the remainder of his 18-month COBRA maximum coverage period (through December 31, 2024). 

The Health FSA COBRA Premium

The COBRA rules permit the plan to charge 102% of the applicable premium.  In other words, the full cost of coverage plus a 2% administrative fee.

In the case of the health FSA, the cost of coverage is the amount elected by the employee.  The employer will therefore take 1/12 of that election amount (plus the 2% administrative fee) to determine the applicable monthly COBRA premium.

In most cases, individuals electing COBRA will no longer have any ability to make pre-tax payroll deductions because they are no longer receiving compensation from the company.  Accordingly, as with other group health plans, employees typically pay the health FSA COBRA premium on an after-tax basis.

Rocky works for Gazzo Loans and enrolls in the company’s health FSA with a $1,000 election.

Rocky’s account is underspent at the time of the termination because he had contributed more ($500) than he had received in reimbursement ($200).

Rocky’s COBRA premium to continue health FSA coverage will be $85 per month ($1,000 x 1/12 x 1.02).

Exception: Carryover Amount Not Included in Health FSA COBRA Premium

Any carryover amount is included in determining the amount of the benefit that the COBRA qualified beneficiary is entitled to receive through the health FSA.  However, IRS guidance confirms the COBRA premium to continue health FSA coverage cannot include carryover amounts. 

In other words, the COBRA premium for the health FSA is based solely on the employee’s salary reduction election for the year and without regard to any available carryover amount.

Rocky works for Gazzo Loans and enrolls in the company’s health FSA with a $1,000 election for the 2023 calendar plan year.

He does not incur any reimbursable claims in 2023, so he forfeits $390 and carries over $610 to the 2024 plan year.

Rocky makes another $1,000 health FSA election of the 2024 plan year.

He terminates mid-year on the last day of June 2024, still without incurring any reimbursable expenses.

  Result 6:

Rocky’s COBRA premium to continue health FSA coverage through the end of 2024 will be $85 per month ($1,000 x 1/12 x 1.02).

Rocky will have access to the remaining $1,000 from his 2024 election plus the $610 carryover.

The $610 in benefits carried over from 2023 cannot be included in the COBRA premium.

If any amount carries over into the 2025 plan year, Rocky can continue to access that amount through COBRA without any premium until the end of the 18-month maximum coverage period (i.e., through December 2025).

Template Employee Communication of Health FSA Run-Out Period and COBRA Options

The company’s health FSA is a component of company’s cafeteria plan, which is governed by Internal Revenue Code §125. The Section 125 regulations provide that company must follow the written terms of its cafeteria plan document to maintain the tax-advantaged status of employees’ health FSA elections.

Upon terminating employment, you lost coverage under the company’s health FSA. However, there are two options available to you to address unreimbursed funds remaining in the company’s health FSA at the time of your termination:

Run-Out Period:  The company’s cafeteria plan provides a [Enter Period] run-out period for terminated employees to submit claims incurred prior to termination. You must follow the plan’s procedures to properly submit any outstanding claims within that run-out period. At the end of the run-out period, the use-it-or-lose-it rule for health FSAs requires that any unreimbursed funds be forfeited to the plan unless you elect COBRA.

COBRA:  Upon terminating from employment, you experienced a COBRA qualifying event to continue coverage under the company’s health FSA through the end of the plan year. This option will be available to you only if your account was underspent at the time of termination (i.e., you had contributed more than you had been reimbursed at the time of the qualifying event). If you timely elect and pay for COBRA continuation coverage under the health FSA, you will be able to continue incurring claims for reimbursement through the end of the plan year. [Add if Health FSA Offers Carryover] Up to [Enter Carryover Maximum] remaining in your health FSA at the end of the plan year will be subject to the plan’s carryover provision and may continue to be available for the duration of your maximum COBRA period (18 months from termination).

Special Health FSA COBRA Rules for Deceased Employee

The IRS has stated that upon the death of an employee participating in the health FSA, the employee’s surviving spouse and children experience a COBRA qualifying event to continue coverage under the health FSA in the same manner as the employee could upon termination of employment.

Therefore, if the employee dies with an underspent health FSA (i.e., the employee had contributed more than had been reimbursed at the time of death), the surviving spouse or a surviving child should be offered COBRA under the health FSA.  COBRA in that scenario would permit the qualified beneficiary to continue to incur reimbursable claims through the end of the plan year in which the employee died.

For more details: COBRA for an Incapacitated or Deceased Qualified Beneficiary .

Failure to Provide a COBRA Election Notice for the Health FSA

Employers generally must provide the COBRA election notice within 44 days of the loss of coverage. IRC §4980B imposes an excise tax of $100 for each day the election notice is late.  Employers must self-report this excise tax liability on IRS Form 8928 .

Employers avoid this excise tax and the associated reporting obligation on Form 8928 if a) the failure is due to reasonable cause and not due to willful neglect, and b) the failure is corrected during the 30-day period beginning on the date the failure was discovered (or, if earlier, the date the failure should have been discovered using reasonable diligence).  Accordingly, it is critical that employers use reasonable diligence to discover errors, and then correct the failure within 30 days of discovery.

For more details: Failure to Timely Provide COBRA Election Notice .

Reminder: The FSA Use-It-Or-Lose-It Rule

The health FSA is a component of an employer’s Section 125 cafeteria plan.  Section 125 (and its implementing regulations) imposes very strict requirements on the administration of cafeteria plans.

One of the most fundamental of these limitations is that all FSA elections are subject to the use-it-or-lose-it rule.  Upon termination of participation mid-year (e.g., termination of employment), the rule requires forfeiture of any remaining unreimbursed funds after the end of the applicable run-out period (absent a COBRA election).

There is no option for employers to make exceptions to these rules or directly or indirectly refund to employees any unreimbursed FSA amounts remaining following exhaustion of the run-out period plus any period of COBRA continuation coverage.  Engaging in this practice would risk disqualifying the entire Section 125 cafeteria plan if discovered by the IRS, potentially resulting in all elections becoming taxable to all employees.

Newfront Section 125 Cafeteria Plan Guide

FSA Experience Gains from Forfeitures  

Reminder: Special COBRA Rules Apply to Health FSAs that Qualify as Excepted Benefit

The special COBRA rules for health FSAs described above (i.e., coverage available only for underspent accounts and generally only through the end of the plan year) apply to health FSAs that qualify as an “excepted benefit”. 

The two requirements for a health FSA to be considered an excepted benefit are:

The Footprint Rule: All employees eligible for the health FSA must also be eligible for the major medical plan; and

The $500 Rule: Employer nonelective contributions to the health FSA cannot exceed $500.

Health FSAs are almost always designed as an expected benefit to avoid violating the ACA market reform provisions.

ACA and HIPAA Excepted Benefits

The Health FSA Eligibility Footprint Rule

Reminder: COBRA for HRAs

HRAs are also account-based group health plans subject to COBRA, but they do not qualify for the special COBRA rules (i.e., coverage available only for underspent accounts and generally only through the end of the plan year) that apply to health FSAs.  The standard COBRA rules apply to HRA coverage.

Newfront Fringe Benefits for Employers Guide

How COBRA Applies to HRAs  

Relevant Cites:

Treas. Reg. §54.4980B-2, Q&A-8(e):

(e) If the conditions in paragraph (c) of this Q&A-8 are satisfied for a plan year, the health FSA is not obligated to make COBRA continuation coverage available for that plan year to any qualified beneficiary who experiences a qualifying event during that plan year unless, as of the date of the qualifying event, the qualified beneficiary can become entitled to receive during the remainder of the plan year a benefit that exceeds the maximum amount that the health FSA is permitted to require to be paid for COBRA continuation coverage for the remainder of the plan year. In determining the amount of the benefit that a qualified beneficiary can become entitled to receive during the remainder of the plan year, the health FSA may deduct from the maximum benefit available to that qualified beneficiary for the year (based on the election made under the health FSA for that qualified beneficiary before the date of the qualifying event) any reimbursable claims submitted to the health FSA for that plan year before the date of the qualifying event.

IRS Information Letter 2021-0004 :

Section 54.4980B-2, Q&A-8(e) of the Treasury Regulations provides that a health FSA is not required to provide COBRA continuation coverage for the plan year in which a qualifying event occurs except in certain circumstances. For example, COBRA continuation coverage is required if a participant experiences a qualifying event and as of the date of the qualifying event the amount the participant may receive as a reimbursement for medical care from their health FSA for the rest of the plan year exceeds the amount the FSA may require to be paid for the COBRA continuation coverage for the rest of that plan year. Notice 2015-87, 2015-52 IRB 889, clarifies that carryover amounts are considered when determining eligibility for COBRA continuation coverage for a health FSA.

If COBRA continuation coverage is available, the amount the participant may be able to receive as a reimbursement for medical care following termination of employment is generally:

The carryover amount plus the amount of the health FSA contribution elected for the plan year, minus

The amount the plan has reimbursed the employee as of the date of the qualifying event.

The amount that a participant may be required to pay for COBRA continuation coverage for the rest of the year does not include the carryover amount and is:

The amount of the health FSA contribution elected for the plan year, minus

The amount contributed to the health FSA as of the date of the qualifying event. 

Disclaimer: The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential concerns related to, the recipient’s current employee benefits issues. This analysis does not necessarily fully address the recipient’s specific issue, and it should not be construed as, nor is it intended to provide, legal advice. Furthermore, this message does not establish an attorney-client relationship.  Questions regarding specific issues should be addressed to the person(s) who provide legal advice to the recipient regarding employee benefits issues (e.g., the recipient’s general counsel or an attorney hired by the recipient who specializes in employee benefits law).

Brian Gilmore

Brian Gilmore

Lead Benefits Counsel, VP, Newfront

Brian Gilmore is the Lead Benefits Counsel at Newfront. He assists clients on a wide variety of employee benefits compliance issues. The primary areas of his practice include ERISA, ACA, COBRA, HIPAA, Section 125 Cafeteria Plans, and 401(k) plans. Brian also presents regularly at trade events and in webinars on current hot topics in employee benefits law.

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Benefits and Compensation

The intersection of cobra and state ‘mini-cobra’ laws.

Updated: Nov 18, 2021

group health plans subject to cobra

Types of State Continuation Coverage Laws

  • Laws applying to group health plans of small employers
  • Extended continuation coverage beyond the COBRA period
  • Alternative notice requirements

Types of Group Health Plans Subject to State Continuation Laws

How preemption applies (or doesn’t) to various state continuation of coverage laws.

  • Extended continuation coverage beyond the federal COBRA period

Considerations for Employers Sponsoring Insured ERISA Group Health Plans  

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COBRA Questions and Answers: for Employees and Former Employees

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For questions about the COBRA subsidy under the American Rescue Plan of 2021, see Notice 2021-31 , 2021-23 IRB 1173 and Notice 2021-46 , 2021-33 IRB 303. For questions about the extended timeframes due to the Novel Coronavirus Disease (COVID-19) Outbreak, see Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak at 85 FR 26351 and EBSA Disaster Relief Notice 2021-01 .

For the questions and answers about the American Recovery and Reinvestment Act of 2009, see below.

Change in Eligibility

Q1. i just started a new job that provides group health insurance, so i am no longer eligible for the cobra subsidy. how do i notify my former employer that i should no longer receive the subsidy (updated october 15, 2021).

A1. If you become eligible for other group health coverage (such as coverage from a new job) or Medicare coverage, you're no longer eligible for the COBRA subsidy. You must notify the health plan that's been providing your COBRA coverage that you're no longer eligible for the subsidy. This notification must be made in writing.

Once you become eligible for other group health coverage or Medicare, you're no longer eligible for the COBRA premium subsidy, regardless of whether you actually enroll in the other group health coverage or Medicare. Once eligibility for the subsidy ends, if you continue to receive COBRA coverage, you must pay the full COBRA premium without the subsidy, in addition to notifying the health plan.

Q2. What happens if someone fails to notify their plan that they are eligible for other group health coverage or Medicare? (updated September 2, 2009)

A2. An individual who fails to notify the health plan providing COBRA coverage and continues to receive the COBRA premium subsidy after they are eligible for other group health coverage or Medicare may be subject to a penalty under IRC § 6720C. This penalty is equal to 110% of the subsidy provided on the individual's behalf after they became eligible for the other coverage or Medicare. 

Q3. How does a person report the new penalty to the IRS? (updated September 2, 2009)

A3. Anyone who failed to notify their plan that they are no longer eligible for the COBRA subsidy should self-report that they are subject to the penalty by calling the IRS toll-free customer help line at 800-829-1040 . In addition, the individual must notify their plan that they are no longer eligible for the COBRA premium subsidy.

Anyone who suspects that someone may be receiving the subsidy after they become eligible for group coverage or Medicare may report this to the IRS by completing Form 3949-A PDF , available on this website. The completed form should be printed and mailed to:

Internal Revenue Service Fresno, CA 93888

More information about the informant procedures may be found in How Do You Report Suspected Tax Fraud Activity?  

Taxability of Subsidies

Q4. is the cobra premium subsidy taxable income for the individual (updated february 26, 2009).

A4. The premium subsidy is not included in the individual's income. However, there is a phase-out of eligibility for the subsidy, which will increase some high-income individuals' tax liability if they receive the subsidy. The phase-out impacts individuals whose modified adjusted gross income exceeds $125,000, or $250,000 for those filing joint returns. Tax liability is increased, to achieve repayment of a portion of the subsidy, for those taxpayers whose modified adjusted gross income is between $125,000 and $145,000, or $250,000 and $290,000 for those filing joint returns. If a taxpayer's modified adjusted gross income exceeds $145,000, or $290,000 for those filing joint returns, the full amount of the subsidy must be repaid as an additional tax. There is no additional tax for individuals with modified adjusted gross income less than these income levels. 

Q5. Is the 65% subsidy subject to state income tax? (updated March 19, 2009)

A5. The premium subsidy is not included in income for federal tax purposes. However, its treatment for state income tax purposes is determined under state law and depends on the tax law of the particular state. 

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Navigating EAP Compliance: A Guide for Employers

A 2022 Society for Human Resource Management report states that 73% of businesses offered Employee Assistance Program (“EAP”) services. The COVID pandemic has accentuated the critical role of organizational support for the workforce through EAPs. 

According to certain market research, the increased need to address employees' mental and physical health conditions is expected to expand EAP services by 11% or more in each of the three successive years, 2024-2027. The continued expansion of assistance services means employers with these programs must maintain ongoing compliance. 

Both newly adopting employers and veteran EAP employers should be aware of the necessary documents, filings, and notices. We’ve broken down the key considerations for employers when it comes to EAP compliance into the following buckets: 

  • ERISA Compliance
  • COBRA Election Notices
  • HIPAA Considerations 

How to Comply with ERISA 

Many times, program providers state that they do not have to comply with ERISA because they are merely providing referrals. However, upon a closer examination of the referrals being provided are considered medical benefits by the Department of Labor (“DOL”). 

Almost all assistance programs, as a part of the referrals, provide counseling services to participants, who can then be referred out for further services. The DOL also considers mental health counseling, whether for substance abuse, stress, or other issues, as medical care and an ERISA covered benefit.

Once the employer concludes that its EAP is an ERISA covered benefit, ERISA compliance is required with the following:

  • A plan document
  • A Summary Plan Description (“SPD”)
  • An annual Form 5500 (If the plan has 100 or more participants at the beginning of the plan year)

COBRA Election Notices 

The conclusion that the EAP is a medical benefit satisfies the definition of an employer-sponsored group health plan is subject to COBRA. Employers and COBRA administrators commonly complain about the need to include EAPs in COBRA election notices and the burden of processing premium collection for qualified beneficiaries electing continuation coverage for the benefit. Even though the employer can still charge 102% of the cost, it can seem an inappropriate and inconsequential burden given the low COBRA participation rates and low cost of coverage for most EAPs.

Some employers avoid this issue by continuing to provide active EAP coverage for the full 18-month or 36-month maximum coverage period, depending on the qualifying event. The COBRA deferred loss of coverage rules provide that additional periods of active coverage after the triggering event apply toward the COBRA maximum coverage period to reduce the period the qualified beneficiary may continue coverage through COBRA.

This approach avoids the need to offer a COBRA election notice and process the standard COBRA premium collection administration because there will be no right to continue coverage through COBRA after the extended period of active coverage.

EAPs remaining subject to COBRA will want to review the four COBRA notices and ensure timely delivery.

HIPAA Considerations for EAP Compliance 

Again, the fact that the EAP is considered a health plan adds to the compliance burden since the HIPAA definition of covered entities includes health plans. Employers, in their capacity as employers, are not subject to the HIPAA rules. However, the HIPAA rules do apply to any protected health information (“PHI”) an employer/plan administrator holds on a health plan’s behalf when the employer designs or administers the plan. EAPs that are fully insured or embedded in a fully insured policy will not have the same HIPAA burden as a self-insured EAP since the bulk of the HIPAA requirements fall on the insurer.

While most EAPs are considered an excepted benefit for purposes of HIPAA portability and the Affordable Care Act, even if the benefit is offered at no cost doesn’t mean that the EAP avoids the HIPAA rules. Self-insured EAPs will need to enter into a business associate agreement with the EAP provider, include language in the plan document required by the HIPAA rules, develop HIPAA Privacy and Security policies and procedures, perform a plan risk assessment, and train personnel.

Employers that sponsor self-insured health plan or a health flexible spending arrangement through their cafeteria plan, can easily address the EAP HIPAA requirements by forming an Organized Health Care Arrangement (“OHCA”) between the plans. An OHCA allows the employer to consolidate plans and address HIPAA for all similar plans through one application of the requirements.

Getting to EAP Compliance 

Employers should not allow the compliance burden of the EAP deter them from offering this valuable employee benefit. Instead, work with a knowledgeable service provider to make sure your Employee Assistance Program meets all areas of compliance. 

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UnitedHealth Faces Antitrust Probe by US Justice Department (2)

By John Tozzi

John Tozzi

The US Department of Justice has initiated an antitrust investigation into UnitedHealth Group Inc. , people familiar with the matter said Tuesday.

The probe opens a new layer of scrutiny on the largest US health insurer that operates in pharmacy benefits, medical care, technology and other services. It emerged out of concerns about UnitedHealth’s acquisitions of health-care providers and data companies, according to one of the people, who asked not to be identified discussing information that isn’t public.

The company and the Justice Department both declined to comment. UnitedHealth shares dropped as much as 5% at the New York market open Wednesday, the most intraday in a month.

UnitedHealth has drawn criticism for years as it has expanded its reach across the health-care system. Best known for its UnitedHealthcare insurance unit that covers more than 47 million Americans, it gets a growing share of revenue and profits from health-services businesses under its Optum arm.

Optum’s clinics, home-care services, drug plans and pharmacies frequently provide services to UnitedHealthcare members, allowing the company to turn expenses in its insurance business into revenue for Optum. That arrangement has helped power UnitedHealth’s growth, a strategy that competitors have attempted to replicate.

Regulatory Scrutiny

But it has also drawn criticism from antitrust regulators. The Justice Department is also reviewing UnitedHealth’s planned $3.3 billion purchase of home-health provider Amedisys Inc. after the acquisition of rival LHC Group last year. The department sued unsuccessfully to block the health-care giant from acquiring Change Healthcare — the largest electronic data clearinghouse that connects doctors, hospitals, dentists and pharmacies with insurance companies to obtain reimbursement — in 2022.

Read More: Fallout from Change Healthcare Hack Still Roiling Health Care

UnitedHealth executives have said the company enforces strict separation between its insurance business and its Optum services and emphasizes that Optum sells to many other insurance companies that compete with UnitedHealthcare.

A local news outlet in New York, the Examiner News, reported on Monday that UnitedHealth faced the antitrust probe. The Wall Street Journal reported the investigation Tuesday.

The Examiner News, which has reported on Optum’s acquisition of clinics north of New York City, cited internal company emails saying the company received notice of the investigation in October.

UnitedHealth is subject to investigations, audits or reviews by more than a dozen US authorities, including the Department of Justice, according to the company’s regulatory filings.

(Updates with opening share move in third pargraph)

To contact the reporters on this story: John Tozzi in New York at [email protected] ; Chris Strohm in Washington at [email protected] ; Leah Nylen in Washington at [email protected]

To contact the editors responsible for this story: Cynthia Koons at [email protected]

John Lauerman

© 2024 Bloomberg L.P. All rights reserved. Used with permission.

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How Can I Get Dental Insurance?

Investing in your oral health is important. A healthy smile not only enhances your overall well-being but can also boost your confidence. Dental insurance plays a key role in maintaining that bright smile by providing coverage for routine checkups, cleanings, and other necessary dental treatments. In other words, it offers cost-saving benefits for you and your family.

Now, let’s look at how to get dental insurance so you can enjoy these benefits.

How to get dental insurance

There are three main ways to get dental insurance: through your employer, from an insurance company, or via the health insurance marketplace.

1. Coverage through an employer

You can get dental insurance for you and your dependents through your employer if they offer it as part of your employee benefits package. These plans often have a network of dentists that offer employees negotiated rates on in-network services. Your employer may pay for all or a portion of your premiums , which are typically deducted directly from your paycheck.

It's important to note that dental insurance plans also consider out-of-network providers. While you often have the flexibility to choose a dentist outside of the network, the coverage may differ, and you might face higher out-of-pocket expenses.

How to apply for dental insurance from your employer:

To get employer-sponsored dental insurance, you need to enroll during your company's open enrollment period or when you’re hired as a new employee. You may also be eligible for a special enrollment period if you experience a qualifying life event (QLE) — such as getting married, divorced, or having a child. Check with your human resources (HR) department about open enrollment dates, because they can vary.

2. Coverage directly from an insurance company

If your employer doesn’t offer dental insurance, another option is to purchase individual or family coverage directly from an insurance company. Buying directly from insurers means you're not constrained by enrollment periods, since coverage is available year-round. Research reputable dental insurance providers and compare the plans they offer. Consider things like premiums, deductibles, and available dentist networks.

How to apply for dental insurance from an insurance company:

After selecting a plan that aligns with your needs, contact the insurance company to request a quote online or over the phone. If you're satisfied with the plan and its respective costs, you can apply online.

3. Coverage via the health insurance marketplace

Your third option for purchasing a dental plan is to enroll through the health insurance marketplace during open enrollment. Dates can vary by state, but the window to enroll in a marketplace plan is usually between November and December. However, you can also enroll or make changes when you have a qualifying life event.

How to apply for dental insurance from the health insurance marketplace:

To enroll, visit HealthCare.gov — the official health insurance marketplace website. Once there, you can browse and compare different plans and review price options. Depending on where you live, you may be redirected to a specific marketplace site for your state, like CoveredCA.com .

Keep in mind that in most states, you can only purchase stand-alone dental insurance through the marketplace if you also enroll in a health plan at the same time . 1

Light Up the Room With a Healthy Smile

The benefits of dental insurance.

You have several options when it comes to getting dental insurance, but you may be wondering if dental insurance is worth it . This will ultimately depend on your dental needs and budget constraints, but having dental insurance could:

  • Lower what you pay for dental care
  • Help you maintain your oral and overall health
  • Provide coverage for emergencies and major procedures
  • Cover dental care for your eligible dependents

What to look for when buying dental insurance

When comparing dental insurance providers and policies, consider the following factors to help you choose the plan that’s right for you:

  • Coverage options: Make sure the coverage fits your and your family’s needs. In addition to preventive care, basic care, and major care, check to see if a plan offers coverage for things like orthodontic treatments and emergencies.
  • Premiums: Ensure the cost of your premium works for your budget. Be sure to compare plans as premiums will vary.
  • Deductibles: This is the amount you’ll need to pay out of pocket before your insurance kicks in. Factor it in when you are comparing plans.
  • Cost sharing: You may also be responsible for coinsurance and copays . So compare these costs, and determine if they make sense for you financially.
  • Provider’s network: Check the plan’s available network of dentists, and see if your preferred dentist is in-network or out-of-network . Keep in mind that in-network dentists typically offer lower negotiated rates, while out-of-network services may lead to higher out-of-pocket costs.
  • Annual maximum: Find out the maximum amount a specific plan will pay for dental care in a year. Once you reach this limit, any additional dental expenses become your responsibility for the remainder of the year.
  • Waiting periods: Some plans may have a waiting period for certain services. Familiarize yourself with waiting periods for things like major treatments and procedures.

Does my health plan have dental coverage?

Most health insurance plans don’t include coverage for dental services. Routine checkups, exams, X-rays, and other preventive dental care are generally not covered by health insurance. However, health insurance may cover dental procedures deemed medically necessary , such as those related to accidents, trauma, or specific health conditions. 2

Ultimately, for comprehensive dental coverage, you likely need to purchase a separate dental insurance plan. However, if you get your health insurance through the marketplace, insurers are required by law to provide dental coverage to kids ages 18 and under. 1

There may be certain circumstances where you have the option to opt into a dental plan, either as an addition to your existing health insurance or as a stand-alone benefit. Consult with your employer or insurance provider to discuss your options.

Can I get dental insurance from my spouse or parent’s plan?

Yes, in some cases, you can get dental coverage through your spouse or parent’s insurance. For instance, if your spouse has employer-sponsored dental insurance, they can add you as a dependent to their plan. Many plans allow employees to add their spouse and children as eligible dependents.

If you’re a dependent child under the age of 26 , you may be eligible for dental coverage under your parent’s plan. 3 Again, this can vary by employer or insurance provider, so be sure to review your plan details to learn who’s eligible.

To be added as a dependent, your spouse or parent would need to do this during their plan’s open enrollment period or during a special enrollment period.

How does COBRA work with dental insurance?

If you no longer have access to health insurance because, say, you lost your job or your hours have been reduced, the Consolidated Omnibus Budget Reconciliation Act (COBRA) can help. COBRA typically allows you to retain your coverage for medical, vision, and dental benefits . 4 But keep in mind that COBRA coverage is temporary and normally lasts for 18 or 36 months . 5

Explore Dental Insurance During Open Enrollment

You might also like:.

Healthy living means caring for your entire self — from the top of your head to the tips of your toes — and of course, that includes your teeth.

Your lifestyle, your priorities, and your dreams are all part of your financial future. To protect it, you may need multiple types of insurance coverage.

Quality dental care can impact your overall health. So, choosing a dentist is an important decision you’ll want to make as soon as possible.

1 “Dental coverage in the Marketplace,” HealthCare.gov. Accessed Feb 22, 2024.

2 “What Dental Procedures Are Covered By Medical Insurance? (Completed Examples),” CDHP Dental Health Project. Accessed Feb 22, 2024.

3 “How to get or stay on a parent’s plan,” HealthCare.gov, Accessed Feb 22, 2024.

4 “Can I Keep My Dental and Vision Plans While On COBRA?” COBRAinsurance.com. Accessed Feb 22, 2024.

5 “An Employee’s Guide to Health Benefits Under COBRA,” U.S. Department of Labor, Sept. 2022. Accessed Feb 22, 2024.

Nothing in these materials is intended to be advice for a particular situation or individual. These materials are for general information purposes only.

IMAGES

  1. An Employer'S Guide To Group Health Continuation Coverage Under Cobra

    group health plans subject to cobra

  2. 7 Facts About COBRA Health Insurance Plan

    group health plans subject to cobra

  3. COBRA Covered Employers and Health Plans

    group health plans subject to cobra

  4. COBRA 1 Learning Objectives COBRA overview Plans subject

    group health plans subject to cobra

  5. Your Guide to COBRA Continued Health Coverage

    group health plans subject to cobra

  6. Group Health Insurance Continuation of Coverage COBRA

    group health plans subject to cobra

COMMENTS

  1. An Employee's Guide to Health Benefits Under COBRA

    Plan Coverage. COBRA covers group health plans sponsored by an employer (private-sector or state/local government) that had 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.

  2. PDF FAQs on COBRA Continuation Health Coverage for Workers

    Plan Coverage - COBRA covers group health plans sponsored by an employer (private-sector or state/local government) that employed 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.

  3. Learn about COBRA insurance and how to get coverage

    Learn how COBRA works. COBRA applies to most private sector businesses with 20 or more employees. It requires an employer's group health insurance plan to continue after qualifying life events. These include: Termination or a reduction of a covered employee's hours. Divorce or legal separation from a covered employee. Death of a covered employee.

  4. COBRA Continuation Coverage: Which Plans Are Subject to COBRA?

    In reality, most group health plans are subject to COBRA and continuation must be offered when a qualifying event results in a loss of a coverage. Failure to recognize COBRA qualified plans is an easy way to fall out of compliance and risk litigation and fines. What exactly is a group health plan? A plan, fund or program;

  5. What benefits are covered under COBRA?

    According to the U.S. Department of Labor (DOL), COBRA "applies to all private-sector group health plans maintained by employers that had at least 20 employees on more than 50 percent of its ...

  6. COBRA Continuation Coverage Factsheet

    The COBRA law only applies to group health plans maintained by employers with 20 or more employees in the prior year. In addition, the law does not apply to plans sponsored by the governments of the District of Columbia or any territory or possession of the United States, certain church-related organizations, or the federal government ...

  7. Most EAPs Are Group Health Plans Subject to COBRA

    A group health plan that is subject to COBRA is also an ERISA welfare benefit plan. This means the EAP needs to be included in the wrap plan document and wrap SPD. Furthermore, all the standard ERISA rights and obligations (e.g., the §404 (a) (1) fiduciary duties) will apply. Employers will also need to report the EAP on the Form 5500.

  8. COBRA Continuation Coverage Questions and Answers

    Note that the group health plan is permitted to charge up to 150 percent of the applicable premium for the 11-month extension. ... An employer that is subject to COBRA requirements is required to notify its group health plan administrator within 30 days after an employee's employment is terminated, or employment hours are reduced. ...

  9. PDF An Employer's Guide to Group Health Continuation Coverage Under COBRA

    Group Health Plans Subject to COBRA COBRA generally applies to all private sector group health plans maintained by employers that had 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

  10. When an Employee Assistance Program is Subject to COBRA

    In general, COBRA applies to group health plans that provide medical care or healthcare. If the EAP provides employees (and spouses, if eligible under the EAP) coverage for licensed health providers that assist in diagnosing and prescribing treatment related to the individual's health condition, then the plan is likely subject to COBRA.

  11. What Is COBRA Coverage and What Do Employers Need To Know?

    COBRA laws generally apply to group health, dental, and vision plans offered by private employers with 20 or more employees on 50 percent of its typical business days during the preceding calendar year. When determining if COBRA applies to a business, both full-time and part-time employees count toward this number — the federal government ...

  12. Is an employee assistance program (EAP) subject to COBRA? Is it ...

    An employee assistance program (EAP) is subject to COBRA if it meets the definition of a group health plan. COBRA defines a group health plan as a plan that the employer maintains or supports and ...

  13. Workplace Wellness Programs

    A wellness program that provides medical care is considered a group health plan that is subject to COBRA, unless the employer sponsoring the program qualifies for the exemption for small employers or churches. "Medical care" broadly refers to the diagnosis, cure, mitigation and prevention of disease and includes wellness services such as ...

  14. COBRA for the Health FSA

    Short Answer: The health FSA is a group health plan subject to COBRA. However, COBRA coverage is available only for underspent accounts and only through the end of the plan year of the qualifying event. The exception is where the health FSA offers the carryover, COBRA continues to be available for the full (typically 18-month) maximum coverage ...

  15. The Intersection of COBRA and State 'Mini-COBRA' Laws

    Consequently, such laws are not preempted by ERISA, and group health plans could be subject to both federal COBRA and state "mini-COBRA" (to the extent the state insurance continuation rule is more generous than federal COBRA). Stated more broadly, if a large employer (more than 20 employees) maintains an insured group health plan, the ...

  16. COBRA Covered Employers and Health Plans

    Also, the federal government's group health plan is not subject to COBRA. However, a separate law—the Federal Employees Health Benefits Amendments Act of 1988—requires the federal government to provide continuation coverage. Churches Church plans are exempt from COBRA's requirements. A church plan is any employee benefit plan ...

  17. COBRA Questions and Answers: for Employees and Former Employees

    For questions about the COBRA subsidy under the American Rescue Plan of 2021, see Notice 2021-31, 2021-23 IRB 1173 and Notice 2021-46, 2021-33 IRB 303.For questions about the extended timeframes due to the Novel Coronavirus Disease (COVID-19) Outbreak, see Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak at 85 FR ...

  18. Employee Assistance Compliance Standards

    A plan document; A Summary Plan Description ("SPD") An annual Form 5500 (If the plan has 100 or more participants at the beginning of the plan year) COBRA Election Notices . The conclusion that the EAP is a medical benefit satisfies the definition of an employer-sponsored group health plan is subject to COBRA.

  19. PDF COBRA and Minnesota Continuation Laws

    In general, fully insured group health plans are subject to both state and federal continuation laws. Self-insured plans subject to ERISA must follow only federal requirements, although they could choose to follow MN State law where the state law is more generous than federal COBRA. In Minnesota, political subdivision groups

  20. UnitedHealth Faces Antitrust Probe by US Justice Department (1)

    The US Department of Justice has initiated an antitrust investigation into UnitedHealth Group Inc., according to people familiar with the matter. ... Best known for its UnitedHealthcare insurance unit that covers more than 47 million Americans, it gets a growing share of revenue and profits from health-services businesses under its Optum arm ...

  21. How Can I Get Dental Insurance?

    1 "Dental coverage in the Marketplace," HealthCare.gov. Accessed Feb 22, 2024.. 2 "What Dental Procedures Are Covered By Medical Insurance? (Completed Examples)," CDHP Dental Health Project. Accessed Feb 22, 2024. 3 "How to get or stay on a parent's plan," HealthCare.gov, Accessed Feb 22, 2024.. 4 "Can I Keep My Dental and Vision Plans While On COBRA?"