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What Is Cobra Health?

In 1986, Congress put into law the Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provisions, according to the U.S. Department of Labor. COBRA amended the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Service Act.

  1. Function

    • COBRA provides terminated employees with the opportunity to continue their employer-sponsored health plan for a period of up to 18 months in most cases, according to the U.S. Department of Health and Human Services (HHS).

    Considerations

    • In order to qualify for COBRA, your former employer must have 20 or more employees. You can access COBRA if you leave a job voluntarily or were terminated, as long as "gross misconduct" is not the reason, notes the Department of Labor. COBRA applies to any beneficiaries (spouse, dependent children) who were covered under the plan.

    Cost

    • The Department of Labor notes that coverage under COBRA is typically more expensive for a former employee than it was when they were working. This is because most employers pay a portion of a group plan's premium for active employees.

    Subsidy

    • Under laws signed by President Barrack Obama, employees who were involuntarily terminated between September 2008 and February 2010 are eligible for a 65 percent federal subsidy to help cover the cost of COBRA, reports HHS.

    Important Guideline

    • Your employer is required by law to notify you of COBRA eligibility within 14 days of a qualifying event (e.g., termination). You have 60 days to decide if you wish to accept the coverage, according to the Department of Labor.

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