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Consolidated Omnibus Reconciliation Act

Intended to aid workers and their families who have lost their health benefits, the Consolidated Omnibus Reconciliation Act, also known as COBRA, provides options for continuing coverage.

  1. Function

    • Losing health benefits under certain circumstances will trigger eligibility for assistance from COBRA. It gives terminated employees and their families the option to continue receiving the benefits, generally at a higher premium.

    Eligibility

    • COBRA assistance is available if the employee has lost his job loss (either voluntarily or involuntarily), had a reduction in hours or is in a "transition between jobs, death, divorce, and other life events” according to the U.S. Department of Labor.

    Coverage

    • Employers with 20 or more employees are required by COBRA to offer employees the opportunity to temporarily extend their health benefit coverage. This is called continuation coverage.

    Premiums

    • People taking advantage of COBRA may have to pay the “entire premium for coverage up to 102 percent of the cost to the plan,” according to the U.S. Department of Labor.

    Considerations

    • Generally, premium amounts must be determined before the start of the 12-month premium cycle. Those covered under COBRA may be liable for all costs related to plan deductibles.

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