History

• In 1986, the Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit was passed. The Act was passed to provide individuals continuous protection with their health care coverage, which might otherwise be canceled due to a change in jobs or for other reasons.
  
  

Coverage

• Temporary health coverage at group rates is provided through COBRA until new health insurance may be purchased. It is available to some former employees, spouses, retirees, as well as children who are dependents. COBRA coverage is not available in all situations and is usually only available for 18 months. COBRA health coverage is typically more expensive for those who use it simply because the premiums will be paid completely by the participant. Although, COBRA costs less than comparable traditional health insurance coverage in many situations.
  
  

Considerations

• COBRA insurance is confusing to those who have never dealt with a loss of their health coverage before. Basically, there are certain conditions that must be met in order for an individual to be eligible for coverage. As long as the employee was part of their employer's health plan the day before they either lost their job or had their hours reduced then they may receive COBRA coverage. If the employee was not on their employer's plan before then they cannot receive COBRA coverage.
  Not all employers offer health plans that are COBRA eligible. The general rule is that the employer must have covered at least 20 employees the previous calendar year for employees to be able to receive COBRA coverage.
  COBRA benefits typically last 18 months, but in some situations it may be available for up to 36 months. COBRA will allow the individual to receive the same health care coverage as when they were employed.
  
  

Eligibility

• In order for an individual to be eligible for COBRA she must have been enrolled in her employer's health care plan when employed. Also, the health coverage must be continued by the employer for other active employees. Individuals are eligible for COBRA when an event, like loss of job, reduction of hours or the like, occurs and the individuals would otherwise lose their health care coverage.
  
  

Group Health Plans

• In general, the law will require COBRA coverage for health plans that are provided by private employers that have at least 20 employees as well as local and state governments and employee organizations.