What Benefits Does the Cobra Law Cover?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) was enacted in 1986 to protect the health insurance benefits of U.S. workers and their dependents when they lose or change jobs.

Features

COBRA is designed to temporarily protect workers' ability to maintain health coverage at group rates. Upon losing or changing jobs, workers would no longer qualify for any subsidies from the employer, thus making the premium for coverage entirely the individual's responsibility. As of 2009, under the American Recovery and Reinvestment Act, COBRA recipients paid only 35 percent of their COBRA premiums for up to nine months.

Function

COBRA coverage is intended to continue health insurance coverage while you find other employment or move to Medicare. COBRA benefits will cover 18 months, though extensions may be applied for.

Availability

COBRA coverage is only available under certain circumstances, such as voluntary or involuntary termination of employment or the reclassification of employees to part time after a reduction of hours.

Eligibility

COBRA covers employees who worked for a company with 20 or more full-time employees and offered health insurance for the entire calendar year before a qualifying event, such as a job loss.

Time Frame

You must elect COBRA coverage within 60 days of the qualifying event.

References

• U.S. Department of Labor: FAQs For Employees About COBRA Continuation Health Coverage