Federal Consolidated Omnibus Budget Reconciliation Act (COBRA)
For groups with 20 or more employees
COBRA gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events.
COBRA is a federal law that applies if your former employer had 20 or more employees in the prior year and you had a COBRA qualifying event, such as an involuntary job loss. If COBRA applies, you and your family may have the right to continue the group health care benefits provided by your former employer for a limited period of time. You may be required to pay the entire premium for coverage, up to 102% of the cost of the group health care benefits.
Coverage can be continued for 18 months; 29 months if you become eligible for social security disability during the first 60 days of COBRA continuation; 36 months if you were insured through your spouse’s or parent’s group coverage and the spouse or parent has died, divorced, or separated. COBRA also applies to dependent children who lose coverage because they reach maximum age limits.
COBRA only applies if and as long as your former employer continues to provide group health care benefits. It does not apply if the employer terminates the plan, goes out of business, or fails to pay the premium.
COBRA applies to all employers with 20 or more workers. This includes self-insured employers, but does not apply to plans sponsored by the federal government or certain church related organizations as defined by federal law.