6.2 Georgia COBRA and State Continuation Rights

Who COBRA Covers and Qualifying Events

The Consolidated Omnibus Budget Reconciliation Act (COBRA) lets employees and dependents keep group health coverage temporarily after it would otherwise end. Federal COBRA applies to private employers, state, and local governments that had 20 or more employees on more than half the typical business days in the prior calendar year. It does not apply to the federal government, church plans, or employers under 20 (those fall to Georgia state continuation).

Continuation is triggered by a qualifying event that, combined with the loss of coverage, gives a qualified beneficiary (employee, spouse, or dependent child) the right to elect.

Extensions

A qualified beneficiary is anyone who was covered the day before the qualifying event — the employee, spouse, and dependent children, including a child born or adopted during a COBRA period. Each qualified beneficiary has an independent election right: a spouse may elect COBRA even if the employee declines it.

Exam trap: Termination for gross misconduct is not a qualifying event — no COBRA is owed. "Gross misconduct" is narrow; ordinary poor performance still qualifies. Likewise, voluntary resignation does count as a termination qualifying event.

COBRA Notice, Election, and Premium Deadlines

The timeline is heavily tested. Memorize the 30 / 14 / 60 / 45 / 30 sequence.

When the employer is also the plan administrator, the combined window to deliver the election notice is 44 days from the qualifying event.

COBRA premiums

Worked example: an employer pays $600/month and the employee paid $150 while active. The full premium is $750. COBRA may charge up to 102%, or $765/month — the dramatic jump that surprises clients is losing the employer's $600 contribution, not the 2% fee.

The first premium can be paid retroactively to the date coverage was lost, so there is no gap: even if a beneficiary waits the full 60 days to elect and 45 more to pay, coverage is reinstated back to the loss date once payment clears. Claims incurred during that window are paid retroactively. Conversely, if the initial premium is never paid within 45 days, the election is void and coverage never takes effect.

Georgia State Continuation and Counseling Clients

Because federal COBRA exempts small employers, Georgia state continuation law gives employees of groups under 20 employees a continuation right when they lose coverage. It mirrors COBRA in concept — same group plan, employee pays the premium — but the duration is shorter (commonly 3 to 4 months of continuation rather than 18–36), and it is regulated by the Georgia Commissioner of Insurance under Title 33.

How coverage terminates early

Even within the maximum period, COBRA or state continuation ends when:

• Premium is not paid within the grace period
• The maximum continuation period is reached
• The employer stops offering any group health plan
• The beneficiary becomes covered under another group plan (with no applicable pre-existing limitation) or enrolls in Medicare after electing

Producer counseling checklist

A producer comparing options should walk the client through alternatives, because COBRA at 102% is often the most expensive choice:

1. Calculate the true COBRA cost — full premium plus the 2% fee, no subsidy.
2. Check the ACA Marketplace — loss of job-based coverage is a special enrollment event, and premium tax credits can make a Marketplace plan cheaper than COBRA.
3. Consider a spouse's plan — loss of coverage opens a special enrollment window there too.
4. Evaluate Medicare or Medicaid/PeachCare if the client qualifies.
5. Mind the deadlines — missing the 60-day election or 45-day initial payment forfeits the right.

Exam trap: Electing COBRA is not required before buying Marketplace coverage, and electing COBRA can lock a client out of Marketplace subsidies until open enrollment or another qualifying event — advise comparison before electing.