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COBRA has not lost its bite

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Q. Did the new health care law eliminate COBRA and, if so, when does this take effect? S.R.J., Minneapolis

A. The Affordable Care Act does not repeal the long-standing law known as COBRA (short for “Con­soli­­dated Omnibus Budget Reconciliation Act”). Under COBRA, an employer with 20 or more employees must offer to continue health insurance coverage for a departing employee for up to 18 months. The maximum continuation period is extended to 29 months for an employee who suffers a disability; 36 months for a spouse or dependent facing loss of coverage due to death, divorce or legal separation.

Tip: If an employee elects continued coverage, he or she generally has to pay the full cost of the premiums plus a 2% administrative fee.

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