Are self-insured plans subject to COBRA?

• A. No
• B. Only if funded by private insurers
• C. Yes; both insured and self-insured plans are covered
• D. Only if state law applies

Answer: (C)

COBRA continuation coverage applies to group health plans, and the funding method doesn’t decide coverage. Whether a plan is insured or self-insured is not the factor; what matters is that it is a group health plan established and maintained by an employer or employee organization for employees and their dependents. Self-insured plans are funded by the employer directly (without a private insurer), but they are still group health plans. Because of that, they fall under COBRA just like fully insured plans. There are some exceptions for certain government or church plans or plans not subject to ERISA, but in the typical private-sector context, both insured and self-insured plans are covered.