356 / What are the coverage continuation or COBRA requirements that certain group health plans must meet?

An insured or self-funded group health plan maintained by an employer to provide health care, directly or otherwise, to the employer’s employees, former employees, or their families generally must offer COBRA continuation coverage. Certain plans are exempt from the COBRA continuation coverage rules ( Q 360). Insured plans are not only those providing coverage under group policies, but include any arrangement to provide health care to two or more employees under individual policies. A plan is an employer provided health plan if the plan’s coverage would be unavailable at the same cost to individuals absent the individual’s employment-related connection with the employer; it is immaterial whether the employer makes contributions to the plan on behalf of its employees.¹

COBRA generally does not require plan sponsors to offer continuation coverage for disability income coverage.² For contracts issued after 1996, the COBRA requirements do not apply to plans under which substantially all of the coverage is for qualified long-term care services. A plan may use any reasonable method to determine whether substantially all of the coverage under the plan is for qualified long-term care services.

Additionally, amounts contributed by an employer to an HSA or an Archer MSA ( Q 390, Q 422) are not considered part of a group health plan subject to COBRA continuation requirements.³