How to determine if COBRA applies: counting employees.

• A. Count only full-time employees.
• B. Count both full-time and part-time employees; each part-time employee counts as a fraction of an employee.
• C. Do not count part-time or temporary employees.
• D. Count only employees who have worked at least one year.

Answer: (B)

The determining factor for COBRA applicability is how you count the employer’s workforce, using full-time equivalents. You don’t just count full-time workers; part-time employees are included as fractions of a full-time employee, so the overall size reflects the real staffing level.

That’s why the best approach is to count both full-time and part-time employees, with each part-time worker counted as a fraction of a full-time employee. For example, 15 full-time employees plus 20 part-time employees who each work half-time would equal 15 + (20 × 0.5) = 25 full-time equivalents, which can push the employer over the threshold for COBRA applicability.

Counting only full-time workers would understate the workforce. Excluding part-time or temporary workers ignores how many people the plan actually covers. Requiring a year of service isn’t a COBRA criterion for size counting.