COBRA
What is COBRA?
COBRA usually pertains to an insurance program which gives some employees the ability to continue health insurance coverage after leaving employment. [1] This is known as continuation of coverage.
When employees lose their jobs, they are able to continue their employer-sponsored coverage for up to 18 months through the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).[2]
COBRA contains provisions giving certain former employees, retirees, spouses former spouses, and dependent children the right to temporary continuation of health coverage at group rates.
This coverage, however, is only available when coverage is lost due to certain specific events. Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since usually the employer pays a part of the premium for active employees while COBRA participants generally pay the entire premium themselves. It is ordinarily less expensive, though, than individual health coverage. [3]
Background
The Consolidated Omnibus Budget Reconciliation Act of 1985 (or COBRA) is a law passed by the U.S. Congress on a reconciliation basis and signed by President Ronald Reagan.
In 1986, Congress passed the landmark Consolidated Omnibus Budget Reconciliation Act health benefit provisions. The law amends the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Service Act to provide continuation of group health coverage that otherwise might be terminated. [4]
