CLICK HERE for an Overview of the “Patient Protection and Affordable Care Act of 2010“, better known as “Obamacare“, and other Health Care Reforms.

The Department of Labor (DOL) has an online resource called the “elawsHealth Benefits Advisor” (see link below) where employers can more fully understand and learn how to better comply with the requirements of COBRA & HIPAA. COBRA & HIPAA Laws are subject to regular amendments; therefore, for the most up to date information please refer to the following online resources and your own counsel:

The following link opens a PDF file covering the Federal COBRA Law as provided by the US Dept. of Labor. You will need Acrobat Reader 3.0, or higher, to read this file (click HERE first to download a free copy of Adobe Acrobat Reader that reads all PDF files).



The U.S. Department of Labor (DOL) issued a reporting and disclosure guide for employee benefit plans that assists employers, plan sponsors, service providers and other plan officials in meeting their obligations under the Employee Retirement Income Security Act (ERISA).

For the first time, the guide includes information on documents that group health plans must provide to participants, including those covered under the Consolidated Omnibus Budget & Reconciliation Act (COBRA). Documents of particular interest to COBRA administrators are listed below.

  • Initial (or general) COBRA Notice

  • COBRA Election Notice

  • Summary Plan Description

  • Summary of Material Modification

  • Certificate of Creditable Coverage

  • Medical Child Support Order

  • National Medical Support Notice

The Reporting and Disclosure Guide for Employee Benefit Plans is available from the DOL by calling 866-444-3272 or on the web at:

COBRA, and Cal-COBRA, mainly address the rights of employees and their dependents to continue employer sponsored Group Health Insurance Benefits following termination and/or other “Qualifying Events”. The difference between the two has to do with slightly differing responsibilities of the employer, where the federal Law applies to employer groups of 20+, and Cal-COBRA to smaller sized groups of 2-19 employees. Federal COBRA requires the employer to provide not only the initial Notice of COBRA Rights, but also the Election Notice and premium collection functions, whereas Cal-COBRA transfers the latter requirements to the Insurer.

California also offers additional extensions beyond the typical 18 months of COBRA for subscribers and legally married spouses, however, the following conditions apply:

  • subscriber has worked for the employer at least 5 years prior to termination

  • is 60 years old or older on date employment ends, but still under age 65

  • subscriber is entitled to and elects COBRA, Cal-COBRA

  • subscriber is not covered under any other group plan not maintained by the employer or former employer even if that coverage is of lesser value

Additionally, California Insurers offer what is referred to as “California Continuation COBRA” for former employees and their dependents, including divorced or surviving spouses, that can continue COBRA coverage for up to 5 continuous years upon exhaustion of COBRA or Cal-COBRA, and regardless of the age or length of employment of the subscriber; however, premiums are higher with the extended coverage (as much as 213% higher). The following conditions apply:

It is the employers responsibility to notify qualifying subscribers 90 days prior to the end of COBRA benefits, and the employee then has 30 calendar days prior to the date that COBRA or Cal-COBRA ends, to notify the Insurer of their intention to enroll, at which time most Insurers would take over the responsibility for the billing and collection of premiums. The following “termination conditions” apply:

  • member reaches age 65

  • member becomes covered under another group health plan

  • member becomes eligible for Medicare

  • former employer terminates its contract with the same Insurer

  • member fails to pay premiums as billed

  • the spouse or surviving spouse exhausts their 5 continuous years of “California Continuation COBRA”

Assembly Bill 1401 – Extends COBRA & Cal-COBRA Coverage

Assembly Bill 1401 was signed into law September 2002 making changes to the length of COBRA and Cal-COBRA coverage, California Conversion Plans, HIPAA Continuation of Coverage rules, and to the State’s MRMIP Program.

One item in particular that should receive special attention…AB1401 will require plans and insurers to offer health benefit coverage to certain individuals. The bill, would revise coverage requirements for converted policies and would also require a health care service plan and a health insurer to offer specified individuals who begin receiving continuation coverage on or after January 1, 2003, and who have exhausted their continuation coverage under federal continuation coverage provisions, an opportunity to extend the term of their coverage to 36 months. The bill would also extend continuation coverage for specified individuals under Cal-COBRA to 36 months.

To view AB 1401 in its entirety, please – CLICK HERE

HIPAA (the Health Insurance Portability & Accountability Act), another such Law that followed COBRA Law in 1996, is a further “expansion of COBRA”; however, it deals mainly with the issue of portability of health coverage (i.e. the ability of an insured who has exhausted COBRA extended benefits, to then be able to obtain replacement non-Group coverage, but on a guaranteed issue basis, and regardless of negative health history). Click Here for HIPAA info.

Contents Within a Typical Employer COBRA Notice:

Note that upon hire, an employee must be given a Notice informing them that they have COBRA rights, and they must be given another Notice & Election Form upon a “Qualifying Event” (QE). Understanding what is, and what is not a “QE”, and that these can be caused not only by employees but also by changes in circumstances among their dependents, is critical to understanding and controlling employer liabilities caused by compliance violations and oversight surrounding COBRA matters.

  • First and Last Names of all “Qualified Parties” (employee and dependents).

  • Date of “Qualifying Event” (these can be caused by the actions of employees as well as their dependents).

  • End of Qualifying Date [(usually 18 months, or 36 months for dependents, and can be 29 months or longer if disabled at time of QE) assuming no lapse due to non payment of premiums].

  • Election Form – Plan benefits available (acceptance or declination-initial) * Medical , Dental, Vision, Life, etc. * Cost of each plan – Employers Contribution is 0% -Vs- what it was; Employee’s Cost is now 100% -Vs- what it was, and may also include an added Administrative Fee (max amount is 2% under Federal COBRA, or 10% under Cal-COBRA).

  • Payment Due Date each Month (detailed mailing and contact info for timely payment).

  • Election Due Date

  • Coverage may be cancelled if payment not rec’d by _______ Date_____.

  • Plan design or plan changes if any (provide copy of plans employee handbook)

  • Signature by employee accepting or declining coverage and date.

IMPORTANT NOTE: partners with several third party COBRA/HIPAA Administrators to manage compliance matters for its clients. We have found that the slightly added costs of these services are well worth the savings in rather substantial fines and penalties that, more often than not, most employers incur due to lack of a complete understanding of such compliance matters.

Disclaimer: The material discussed herein is meant for general illustration or informational purposes only and is not to be construed as investment advice. Although the information has been gathered from sources believed to be reliable, it is not guaranteed. Please note that individual situations can vary; therefore, the information contained herein should be relied upon only when coordinated with individual professional advice. We are not licensed for and therefore do not provide tax or legal advice.

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