After an employee is terminated, COBRA coverage is handled directly by the employer or their COBRA administrator, and is separate from Take Command—COBRA does not continue or interact with ICHRA or QSEHRA benefits administered through Take Command.
COBRA Coverage and Responsibilities After Employee Termination
Employers and employees often have questions about handling COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage after an employee's termination within the context of an Individual Coverage Health Reimbursement Arrangement (ICHRA) administered by Take Command. This article covers all aspects of COBRA responsibilities and provides clarity on several key areas of concern.
Introduction to COBRA and ICHRA
COBRA allows employees and their families to retain health insurance coverage after employment termination, typically requiring continued premium payments. With ICHRA, COBRA responsibilities differ slightly from traditional group health insurance plans, and the administration of these activities falls outside Take Command's purview.
What happens to health coverage after termination?
When an employee is terminated:
Their employer-sponsored group health coverage may be eligible for COBRA continuation
Their eligibility for ICHRA or QSEHRA ends as of their termination date
COBRA, if offered, is managed outside of Take Command
COBRA is a separate continuation of the employer’s group health plan, not a Take Command benefit.
Who is responsible for COBRA after termination?
Employer responsibilities
Employers are responsible for:
Determining COBRA eligibility after termination or qualifying events
Sending COBRA election notices to eligible employees and dependents
Providing instructions for enrollment and deadlines
Collecting COBRA premium payments or coordinating with a COBRA administrator
Managing continuation coverage under the group health plan
Employee responsibilities
Employees are responsible for:
Reviewing COBRA election notices after termination
Deciding whether to enroll in COBRA coverage
Paying COBRA premiums directly to the employer or COBRA administrator
Coordinating COBRA coverage with any new employer insurance or Marketplace plan
How does COBRA interact with ICHRA or QSEHRA?
COBRA is separate from HRA benefits.
Employees cannot use COBRA and ICHRA at the same time
If an employee enrolls in COBRA, they are generally not eligible for ICHRA reimbursements while COBRA coverage is active
QSEHRA eligibility requires Minimum Essential Coverage (MEC), and COBRA typically satisfies MEC requirements
ICHRA participation requires eligible individual coverage, and COBRA does not qualify for most ICHRA designs
Employees should ensure they meet plan-specific eligibility rules before requesting reimbursements.
What should employees do after termination?
After employment ends:
Review COBRA election materials from the employer or COBRA administrator
Decide whether to enroll in COBRA or choose individual Marketplace coverage
Update health insurance information in any relevant systems (if applicable)
Submit any eligible HRA claims within the allowed post-termination window
Maintain proof of coverage for any remaining eligible reimbursement submissions
Interactions with Insurance Carriers
In some cases, especially where no third-party COBRA administrator is present, employees and employers must coordinate directly with the insurance carrier. Here’s what to do:
Confirming COBRA Eligibility: Contact the insurance carrier that originally issued the employee’s health plan to confirm COBRA eligibility and understand the process for enrollment.
Enrollment Steps and Coverage Options: The carrier provides guidance on enrollment deadlines and available coverage under COBRA when no intermediary is involved.
When to Contact the Carrier: If the plan was purchased via a Marketplace or directly from the carrier, reach out to the appropriate carrier rather than the company’s insurance broker, as brokers don’t handle COBRA documentation or enrollment.
Does Take Command assist with COBRA or State Continuation benefits?
No, Take Command does not assist with or administer COBRA benefits. It is the employer's responsibility to manage these tasks.
What happens to ICHRA contributions after termination?
Employers are not obligated to continue ICHRA contributions after an employee’s termination. However, any existing funds already contributed can be used for eligible medical expenses by the former employee.
What does NOT happen automatically?
After termination:
Take Command does not notify COBRA administrators
COBRA coverage does not automatically enroll or activate through Take Command
HRA benefits do not continue into COBRA coverage periods
Employers must manage all COBRA communications separately