What is COBRA?
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a healthcare insurance program that allows employees and their immediate family to continue with their company healthcare insurance for up to 18 months if a “qualifying event” results in them losing coverage.
(That increases to 29 months if the Social Security Administration declares the person disabled. A widow or ex-spouse’s coverage can continue for 36 months.)
The person simply pays 102 percent of the company’s monthly premium on their own. The law generally applies to companies with at least 20 full-time-equivalent employees.
“Qualifying events” include death of the employee who was covered; loss of coverage eligibility because of involuntary or voluntary termination, or reduced hours due to discharge (“gross misconduct” is an exception), resignation, medical leave, layoff, lockout or strike or reduced business; legal separation or divorce that makes the ex-spouse illegible; or a dependent child becoming too old to remain covered.