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COBRA Continuation Coverage: Who Pays?

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Most employers are aware that the Consolidated Omnibus Budget Reconciliation Act (COBRA) requires group health plans sponsored by covered employers to allow qualified beneficiaries to have “COBRA continuation coverage” in the event that they lose group health plan coverage for specified reasons.

COBRA applies only to employers who had 20 or more employees on more than 50% of typical business days during the prior calendar year. In some situations, insured employees have continuation rights under both federal and state law. When that happens, employees may choose the more favorable law.

Under both the federal law and almost all state laws,

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