b' Wordw w w. w m i m u t u a l . c o mCOBR A By David Leo, Continuation CoverageandPresident oftheSmall Employer ExceptionWMI MutualInsurance Company& WMI TPAIIn 1985, Congress passed the Consolidated Omnibus Budget Reconciliation Act(hence the acronym COBRA). The COBRA law, which was signed by President Ronald Reagan, amended the Employee Retirement Income Security Act of 1974 (ERISA), the law that governs retirement plans and health plans and protects employees and their families when those plans are offered in conjunction with employment. COBRA accomplished many things,butperhapsthemostsignificantandenduringprovisionsofthelawarethepartsthatdealwiththecontinuationofhealthinsuranceandotherwelfarebenefitsafterleavingemploymentorexperiencingcertainotherqualifyinglifeevents.Morespecifically,thelawprovided that most employees and their dependents must be allowed to continue participating in the company health plan long after they have separated from employment or experienced certain life events, and their employers (and the insurance companies and plan administra-tors)musttreatthemasiftheyarestillactivelyaffiliatedwiththeemployer. What is COBRA continuation coverage? The COBRA law requires group health plans toNote: It is a common misconception that someone offer continuation coverage to covered employees,whoelectsCOBRAcoverageisnolongeraffiliatedformer employees, spouses, former spouses, andwith the employer or is no longer a potential risk to dependent children when they would otherwisethe employers health plan. That is incorrect.lose coverage due to separation of employment orCOBRA merely allows the individual to continue another qualifying event. There are a few exceptionstheir group health coverage as an eligible plan to COBRAs continuation requirements participant despite an event that would otherwise (e.g., fraud, gross misconduct); but generally, disqualify them and cause them to lose coverage.if a covered person loses group health insuranceIn other words, with the exception that these indi-eligibility, COBRA allows that person to continueviduals are responsible to pay their own premium, the group insurance coverage (at their own expense)former active plan participants are treated the exact for up to 36 months.same way as if they were still covered as or through an active and eligible employee.20 www.wpma.com / Spring 2020'