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Dear HR Knowledge, do I need to offer my former employee COBRA?
Losing their jobs can be a big financial hit for employees, but losing health benefits can be catastrophic. But the U.S. government has passed the Consolidated Omnibus Budget Reconciliation Act, commonly called COBRA, which gives some terminated workers the right to temporarily – for 18 months – continue participating in their former employer’s group health plan. Many states have their own versions of the COBRA rules, as well.
However, just because your company picks up all or part of the cost for covered employees, it doesn’t have to continue paying its part for departed employees. They must carry the entire load of health insurance themselves, and you’re allowed to add a 2 percent administrative fee.