If you're subject to COBRA, and if you have a group health plan, you have to provide COBRA benefits to qualified beneficiaries. A qualified beneficiary is anyone covered under your group health plan on the day before an event that causes loss of coverage, and it includes:

• employees, including part-time employees, if they are participants in your plan on the day before the qualifying event
• their spouses
• their dependents
• retirees (unless they are eligible for Medicare)
• partners in a partnership
• the American Recovery and Reinvestment Act of 2009, and more recent legislation, allows an individual who is involuntarily separated from employment on or after September 1, 2008, and before June 1, 2010, to elect to pay 35 percent of his or her COBRA coverage and have it treated as paying the full amount for up to 15 months. This subsidy also applies to health care continuation coverage if required by states for small employers. The former employer will be required to pay the remaining 65 percent but, in effect, will be reimbursed by crediting those amounts against income tax withholding and payroll taxes it is otherwise required to remit to the federal government. Income and other limitations on COBRA coverage apply. Eligibility for the premium subsidy phases out for higher income individuals with adjusted gross income for the year between $125,000 and $145,000 for individuals and $250,000 and $290,000 for married couples filing jointly. The Department of Labor website provides a detailed explanation of the COBRA provisions under the Act.

You do not have to offer COBRA coverage to any of the following:

• an employee who is not yet eligible for your group health plan
• an eligible employee who declined to participate in your group health plan
• an individual who is enrolled for benefits under Medicare