According to data from the Bureau of Labor Statistics (BLS), nearly one-third of individuals with at least some college or an associate's degree have held 15 or more jobs between the ages of 18 and 48.
Why is that important? Well, that figure should drive home the point that employees are unlikely to spend years and decades with the same company. It's one of those "in your face" reminders about the reality of the daunting turnover rate in the restaurant industry as well as why understanding the basics of COBRA is imperative for restaurateurs.
Below is a brief overview and guide designed to simplify COBRA.
COBRA, or the Consolidated Omnibus Budget Reconciliation Act, mandates that group health plans offer continuing insurance coverage for employees and their spouses, former spouses, and dependents during specific life events.
These events may include any of the following:
- Death of the employee;
- Termination of the employee;
- Decrease in employee's work hours (for reasons unrelated to misconduct);
- When an employee becomes eligible for Medicare;
- Divorce or legal separation of an employee and spouse; and
- Loss of dependent status for a child.
It's important to note that there is a 60-day election period following the loss of coverage during which COBRA can be purchased. The person electing coverage is called a qualifying beneficiary.
Which Group Health Plans are Included?
In general, all group health plans held by private sector employers who have 20 or more employees are subject to COBRA regulations.
Some states have their own laws regarding COBRA, so be sure to check with your state's insurance commissioner office to verify local legislation. In some cases, there may be mini- COBRA available, which requires group health plans to provide some coverage for employers with fewer than 20 employees.
What Is the Cost of COBRA?
While the continuation of coverage during these life events can be a great help, the cost of COBRA can be prohibitive. Prior to a qualifying event, the employer usually pays a portion of the employee's insurance costs. With COBRA, the qualifying beneficiary pays the full cost.