Consolidated omnibus budget reconciliation act (COBRA)

Federal COBRA

The consolidated omnibus budget reconciliation act (COBRA) is a federal program that provides temporary continuation of health insurance when employer-sponsored coverage is lost. Employers with 20+ employees are required to offer COBRA as part of their group health plan. Learn more about COBRA from the US Department of Labor's website.

State (Mini) COBRA

Some states have developed their own version of continuation coverage. This is often referred to as state or "mini" COBRA and may extend the amount of time required for employers to offer continuation coverage. State COBRA usually applies to employers with less than twenty employees.

Benefits with Gusto

If your health benefits are managed by Gusto, here's what we'll do to help with COBRA:

  • We’ll determine which type of COBRA your company is eligible for. 
  • If you qualify for State COBRA, we’ll send COBRA Election notices to dismissed employees and help get them enrolled if they choose to take this route.
  • If you qualify for Federal COBRA, we’ll connect you with our partner, BASIC Pacific, and they’ll administer COBRA for dismissed employees.
  • When you dismiss employees, we'll send them a COBRA Election notice 3 days after they've been dismissed to let them know their continuation options. If you're using a retroactive date to dismiss the employee, we'll send the notice within 24 hours.

Note: Administration assistance for either type of COBRA comes at no additional cost to the company.

Questions & Answers

Q: What is the deadline to choose COBRA coverage?
A: You'll have at least 60 days from the date that you lose coverage or the date that you receive COBRA Election notices—whichever happens last.

Q: How much does COBRA cost?
A: This depends on the price of your health insurance. You'll have to pay 100% of the premium and you may be charged an additional administration fee which can be up to 15% of your premium.

Q: Do I have to enroll in the same coverage or can I make changes when I choose COBRA?
A: You’re only eligible to enroll in lines of coverage that you were actively enrolled in at the time of termination (i.e. if you previously waived dental coverage, you can’t enroll in dental COBRA coverage). However, if you were previously enrolled in more than one line of coverage (i.e. medical & dental) and don’t want to continue all lines of coverage, you can choose which lines to continue and/or drop (i.e. continue medical & drop dental).


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