We were “right around 20” employees this past year.

Most employers are well aware that there is a 20-employee threshold determining whether their group health plan is subject to federal COBRA or to state continuation coverage, such as Cal-COBRA. Far fewer employers are certain of exactly how to count to 20. And no wonder: the federal government alone requires multiple counting methodologies to determine ACA compliance, COBRA, Medicare as Secondary Payer (MSP), and FMLA, just to name a few.

California and the City of San Francisco also have laws and ordinances which require employee counts, adding even more complexity to that spreadsheet file you just exported from payroll. Apply the same methodology to determine employee counts for all of these, and an employer is certain to either a) spend time and money voluntarily complying with a non-requirement; or b) put their organization at risk by failing to comply with a local, state or federal requirement. Either scenario can be costly.

Is it really that big of a deal?

In general, COBRA requires group health plans to provide continuation coverage to employees, former employees, and their eligible dependents. Messing up someone’s access to continued access to health insurance is not something that goes unnoticed. Think about some of the common reasons people qualify for continuation coverage under COBRA:

Loss of employment. Divorce or legal separation. Reduction in work hours. Death of the covered employee. Serious, stressful stuff. So, let’s get this right.

OK, is my group health plan subject to COBRA?

COBRA generally applies to all private-sector group health plans maintained by employers that had at least 20 employees on more than 50 percent of its typical business days in the previous calendar year. Both full- and part-time employees are counted to determine whether a plan is subject to COBRA.


Got it. So, we have 15 full-time employees and 10 part-time employees. I guess we need a COBRA administrator.

Well, maybe. But maybe not. Reading a little bit further:

Each part-time employee counts as a fraction of a full-time employee, with the fraction equal to the number of hours worked divided by the hours an employee must work to be considered full time. For example, if full-time employees at Company A work 40 hours per week, a part-time employee who works 20 hours per week counts as half of a full-time employee, and a part-time worker who works 16 hours per week counts as four-tenths of a full-time employee.

My calculator is smoking. Where can I get more detailed information?

The Dept of Labor’s Employer’s Guide to Group Health Continuation Coverage Under COBRA is a good start. Need additional help? Reach out to our Allpointe benefits support team.

I can use this same counting method to determine whether our plan or Medicare is primary…right?

Yeah, about that…close, but not exactly. Stay tuned…

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