Society For Human Resource Management (SHRM) Certified Professional Practice Exam

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What factor might influence the COBRA benefits of an employee whose hours were reduced?

  1. The fact that he did not leave his job altogether

  2. The number of employees in the workplace

  3. The types of insurance the company offers

  4. The amount of the health premium he is paying

The correct answer is: The number of employees in the workplace

The COBRA (Consolidated Omnibus Budget Reconciliation Act) benefits are influenced significantly by the number of employees in the workplace. COBRA allows employees and their dependents to continue health insurance coverage after experiencing certain qualifying events, such as a reduction in hours or job loss. For an employer to be subject to COBRA regulations, they must have a minimum of 20 employees on the payroll. Therefore, if the number of employees is below this threshold, the employee would not be eligible for COBRA benefits at all, regardless of their hours being reduced. This underscores the importance of the workplace size in determining the applicability of COBRA benefits for employees. Other factors like whether the employee remained with the company, company insurance types, or the premium amounts they are paying, while relevant in different contexts, do not have a direct impact on the obligation of an employer to provide COBRA coverage when considering the impact of reduced hours.

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