COBRA

What does COBRA mean?

COBRA refers to the Consolidated Budget Reconciliation Act of 1985, and specifically to Title X of the Act. The provisions of Title X include provisions to provide members of company health plans, who have lost their coverage due to a "qualifying event," to continue coverage at the employee's expense for a period of time. Employees, however, are required to pay for COBRA coverage.

Not all employees are eligible for COBRA. For instance, to qualify for COBRA employees must be employed by an employer who has 20 or more employees and the employee must have been involuntarily let go or quit voluntarily. Under some conditions the spouse or dependent child of the employee may also be allowed to receive COBRA coverage.

If an employee has been terminated or quits and meets the requirements outlined above the employer is required to ensure that COBRA coverage is identical to the health plan coverage of similar current employees, and they must notify the employee of their right to coverage when a qualifying event occurs.

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