COBRA covers employees regardless of whether they quit or are terminated (except in cases of gross misconduct), and also covers spouses and children under certain circumstances. Although COBRA paperwork can be a headache, employers can charge recipients 102 percent of the cost, with the extra 2 percent for administration costs.

Understanding and effectively managing COBRA benefits will:

1. Ensure laid-off employees and their families have coverage
2. Help your company avoid heavy fines, as the IRS has stepped up COBRA compliance efforts
3. Prevent you from having to pay medical claims from employees who should have been notified of their coverage, but weren't. In those cases, your insurance company doesn't have your back, making you responsible for paying the former employee's medical bills. COBRA notification is the employer's responsibility, not the insurance company's.

Action Steps
The best contacts and resources to help you get it done

Tips & Tactics
Helpful advice for making the most of this Guide

• Coverage usually ends when coverage under another health plan begins.
• Under the law, children who are born, adopted or placed for adoption with the former employee during the continuous coverage period are now beneficiaries.
• Former employees are not entitled to group term-life insurance under COBRA.