Continuing Healthcare Coverage in Virginia: Virginia’s Mini-COBRA Requirements

The Consolidated Omnibus Budget Reconciliation Act (“COBRA”) is a federal law that allows employees and their dependents to maintain their employer-sponsored group health insurance coverage for a limited period (18 or 36 months from the qualifying event) under certain circumstances such as job loss, reduction in hours worked, job transition, death, divorce, and other qualifying life events. Unless otherwise agreed upon with their employer, employees that elect to opt for continued coverage under COBRA are generally required to pay the full monthly cost of the plan, plus an extra percentage, usually around 2%, for an administrative fee.

Who Does COBRA Apply To?

Federal COBRA applies to employers with 20 or more employees for more than 50% of the business days in the prior year.[1] Virginia employers with fewer than 20 employees are generally not subject to COBRA. However, employers who maintain a group health insurance plan and have at least 2 employees are subject to Virginia’s mini-COBRA law. Under Virginia’s mini-COBRA law, qualified employees must be offered continuation coverage for at least 12 months. This period may end earlier if the employee obtains coverage through a new employer or otherwise becomes covered under another plan.

What Are the COBRA Requirements for Employers?

Employers are required to provide written notice to a former employee of their right to continuation coverage within 14 days of a qualifying event. Virginia Code § 38.2-3541(B)(1) provides that employees must elect mini-COBRA coverage within 31 days after the notice is issued; however, in no event may the election occur more than 60 days after the employee’s coverage terminates. As with federal COBRA, employees who elect continuation coverage are responsible for paying the full cost of their premiums, plus an administrative fee. Employers are not required to offer continuation coverage to employees terminated for gross misconduct.

Employers should ensure compliance with Virginia’s mini-COBRA law to avoid potential penalties and litigation. Employees, in turn, should be aware of their rights and deadlines to avoid a potentially costly lapse in health insurance coverage. If you have questions about your rights or obligations under Virginia’s mini-COBRA law or federal COBRA, consulting an experienced employment law attorney can help ensure you are fully informed and compliant.

Questions about Virginia employment law? Contact Lipp Law today.

[1] See FAQ on COBRA Continuation Health Coverage for Workers, U.S. Department of Labor, available at: https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/cobra-continuation-health-coverage-consumer.pdf.