COBRA
COBRA gives employees who lose group health coverage the right to continue it at their own cost, and PEO transitions create COBRA events that must be administered correctly.
Federal COBRA applies to group health plans of employers with 20 or more employees, and most states run mini-COBRA laws for smaller groups. Inside a PEO, COBRA administration for the health arrangement is typically part of the service.
Entry and exit require a written COBRA handoff. When you join a PEO and drop a prior plan, assign responsibility for existing participants and notices. When you leave, assign responsibility for new continuation rights and ongoing administration after the service agreement ends.