Glossary · Compliance
COBRA (Consolidated Omnibus Budget Reconciliation Act)
Federal law requiring employers with 20+ employees to offer continuation of group health coverage to qualified beneficiaries after qualifying events.
COBRA gives employees and their families the right to continue group health coverage for limited periods (typically 18 or 36 months) after events such as job loss, reduction in hours, divorce, or death. Premium responsibility shifts to the qualified beneficiary.
Most PEOs administer COBRA notices and billing for co-employed workforces. Notice timing and documentation are common audit pitfalls; PEO administration is one of the operational reasons employers cite for moving into a PEO.
Related terms
- ERISA (Employee Retirement Income Security Act)Federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry.
- ACA (Affordable Care Act)Federal law governing employer-sponsored health coverage, including employer-mandate, reporting (1094/1095), and minimum-essential-coverage requirements.
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