The Snake Bite of Employee Benefits: COBRA Health Continuation

Next year will mark 40 years since Congress passed the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA requires employers of 20 or more employees to provide qualified beneficiaries (e.g., an employee, their spouse, or dependent) who have experienced a loss of coverage under a group health plan resulting from a qualifying event, the opportunity to receive continued plan coverage for 18 months or longer. Since enactment, many employer plan sponsors have chosen (for efficiency) to outsource COBRA administration to third-party administrators. Check the service agreement for who bears the risk for mistakes and be sure that lines of communication between the employer and the TPA about terminations and COBRA eligibility are clear. See our resource kit for complete resources.

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Related Content

• COBRA Compliance and Enforcement
  See how the IRS and DOL have jurisdiction over private-sector single and multiemployer group health plans. The DOL's jurisdiction and guidance cover the disclosure and notification requirements of COBRA, and the IRS's jurisdiction and guidance cover eligibility, coverage, and premium payments under COBRA. HHS has jurisdiction over state and local government health plans.
• COBRA Administration Flowchart
  Reference this flowchart outlining the group health plan administrator's (or separate COBRA administrator's) obligations under COBRA.

Practical Guidance Updates 
Featuring the latest updates from your Practical Guidance account.    

• Employee Benefits & Executive Compensation Key Legal Developments Tracker (Current)
  Stay informed on new developments.
  • ERISA Litigation. U.S. Supreme Court has scheduled a January 2025 oral argument in an appeal from Cornell University employees and retirement plan participants who claim that their retirement plan was mismanaged. Cunningham v. Cornell Univ., 2024 U.S. LEXIS 3061 (Oct. 4, 2024).
  • Retirement Plans. U.S. Government accountability Office issues Reported Impacts of Fee Disclosure Regulations, and DOL Efforts to Support Implementation of Regulations.
  • Retirement Plans. IRS releases 2025 cost-of-living adjustments to retirement plan limits and thresholds. The maximum employee salary deferral to a 401(k), 403(b), and most 457 plans increases in 2025 by $500 to $23,500, from $23,000 in 2024, while the catch-up contribution, for eligible employees age 50 and older, remains at $7,500. I.R.S. Notice 2024-80.
  • Health and Welfare Plans. DOL issues Artificial Intelligence and Worker Well-Being: Principles and Best Practices for Developers and Employers (Oct. 16, 2024)
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