Consolidated Omnibus Budget Reconciliation Act (COBRA)

What is Consolidated Omnibus Budget Reconciliation Act (COBRA)?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law enacted in 1986 that allows employees and their families to continue their group health insurance coverage for a limited period under specific conditions, such as job loss, reduction in work hours, death, divorce, and other events.

COBRA ensures that employees and their families do not abruptly lose health coverage during critical life changes.

Let’s explain this with an example. John was laid off by his employer, ABC Corp. Soon after, he received a notice of his COBRA rights. To protect his family and himself from unfortunate events, he elected COBRA coverage. He continued to receive the same medical benefits for the next 18 months while he searched for new employment.

cobra act

Here is a table explaining the qualifying events and the timelines, as specified under COBRA:

Qualifying Event	Qualified Beneficiaries	Maximum Period of Continuation Coverage
Termination (for reason other than gross misconduct) or reduction of employment hours	Employee Spouse Dependent Child	18 months
Employee enrollment in Medicare	Spouse Dependent Child	36 months
Divorce or legal separation	Spouse Dependent Child	36 months
Death of employee	Spouse Dependent Child	36 months

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