The Manager's Pocket Guide to Employee Relations

COBRA—CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT

This act requires most employers with 20 or more employees (except churches and the federal government) to extend health care coverage to terminated employees. The act covers retirees and their spouses, widowed or divorced spouses, dependent children of current or former employees, and employees who voluntarily or involuntarily quit (except those terminated for “gross misconduct”). Normal group coverage is extended for 18 months at the expense of the terminating employee and at no more than 102% of premium costs. It is a good practice to offer COBRA on the last day of employment to make sure you are complying with this act.