Does COBRA apply to Dental, Vision, HRA, and FSA plans?
Short answer: Yes.
COBRA generally applies to all group health plans maintained by private-sector employers (with at least 20 employees) or by state and local governments. The law does not apply, however, to plans sponsored by the Federal government or by churches and certain church-related organizations (see bottom of the page for a complete definition from the 1999 Final COBRA regulations).
Under COBRA, a group health plan is any arrangement that an employer establishes or maintains to provide employees or their families with medical care, whether it is provided through insurance, by a health maintenance organization or out of the employer’s assets on a pay-as-you-go basis.
In other words, the following are group health plans:
- inpatient and outpatient hospital care
- physician care
- surgery and other major medical benefits
- prescription drugs
- dental plans
- vision plans
Life insurance is not considered “medical care,” nor are disability benefits; and COBRA does not cover plans that provide only life insurance or disability benefits.
Planning Pointer
Individuals who are eligible for COBRA can elect any combination of coverages they had on the day before the qualifying event (assuming each type of coverage is a separate group health plan).
For example, a terminated employee who was covered under the medical, dental, and vision plans may choose to elect COBRA for just vision, or just medical and dental.
Defintion of Group Healh Plan from the 1999 Final COBRA regulations
Under the final regulations, a group health plan is a plan maintained by an employer or employee organization to
provide health care to individuals who have an employment-related connection to the employer or employee
organization or to the families of such individuals.
In accordance with section 5000(b)(1), these individuals include employees, former employees, the employer, and others associated or formerly associated with the employer or employee organization in a business relationship. The final regulations generally refer to all individuals covered under a plan by virtue of the performance of services or by virtue of membership in an employee organization as employees.