My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

Determining if COBRA Coverage Is Right for Your Business

What you need to know.
1 min read
Opinions expressed by Entrepreneur contributors are their own.

What does COBRA mean to you? No, it's not a poisonous snake coming back to bite you. The Consolidated Omnibus Budget Reconciliation Act (COBRA) extends health-insurance coverage to employees and dependents beyond the point at which such coverage traditionally ceases.

For employees, COBRA means an extension of up to 18 months of coverage under your plan even after they quit or are terminated by your company (provided the reason for termination isn't gross misconduct). Employees' spouses can obtain COBRA coverage for up to 36 months after divorce or the death of the employee, and children can receive 36 additional months of coverage when they reach the age at which they are no longer classified as dependents.

The good news: Giving COBRA benefits shouldn't cost your company a penny. Employers are permitted by law to charge recipients 102 percent of the cost of extending the benefits (the extra 2 percent covers administrative costs). The federal COBRA plan applies to all companies with more than 20 employees. However, many states have similar laws that pertain to much smaller companies.

Excerpted from Start Your Own Business, 2nd edition: The Only Start-Up Guide You'll Ever Need

More from Entrepreneur

Kathleen, Founder and CEO of Grayce & Co, a media and marketing consultancy, can help you develop a brand strategy, build marketing campaigns and learn how to balance work and life.
Book Your Session

In as little as seven months, the Entrepreneur Authors program will turn your ideas and expertise into a professionally presented book.
Apply Now

Create your business plan in half the time with twice the impact using Entrepreneur's BIZ PLANNING PLUS powered by LivePlan. Try risk free for 60 days.
Start My Plan

Latest on Entrepreneur