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Q: An employer only has 8-9 employees, so they are not subject to COBRA continuation requirements, yet they have elected to provide these benefits to this one employee (and refer to the benefits as COBRA benefits). The group has certified to the insurance company that they are subject to COBRA. They have another terminated employee who is on the plan under a six-month extension. They have not offered COBRA to that employee. This extension employee was terminated for cause. My questions: 1) Can a small employer (less than 20 employees) offer COBRA benefits? 2) By offering COBRA benefits to the terminally ill former employee/owner and not to the employee who was terminated for cause; is the employer liable for discrimination? 3) How can the group certify it is subject to COBRA if there are not at least 20 employees?

A: If the employer has less than 20 employees they may choose to provide group continuation coverage to an employee.   They are not subject to COBRA laws.  The employer is no longer responsible for paying; it will now be the employee’s responsibility for paying the entire cost of the insurance.

Some states offer a Mini-COBRA for employers with less than 20 employees.  A state issued mini-COBRA is similar to Federal COBRA and each state has their own requirements and rules.

Also, under COBRA law an employee that was let go for “gross misconduct” does not qualify for COBRA.