Do small employers have to comply with COBRA? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Do small employers have to comply with COBRA?

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in Employee Benefits Program,Human Resources

Q. We are a small company with only 12 employees. We are under the impression that our employees do not have rights under the Consolidated Omnibus Budget Reconciliation Act (COBRA) since it applies to larger employers. Are we correct?

A. You are correct that the federal COBRA statute does not apply to your company. COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity to extend their health coverage in certain instances.

However, Texas state law may require you to offer continuation coverage, depending on the type of plan your company offers. For example, under certain circumstances, some small-employer health plans must give dependents an opportunity to continue their coverage if they are less than 1 year old or if they have been covered by the plan for more than a year.

In other cases, your employees and their dependents may have the right to elect nine months of continued coverage or convert their coverage into individual policies.

Check the terms of your employee benefit plan and make sure you know how Texas state law impacts your employees.

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