Warning
Info
Warning
Info
Simple English definitions for legal terms
COBRA
Read a random definition: premeditated
A quick definition of COBRA:
COBRA: A law that helps people keep their health insurance when they lose their job or have a big change in their work situation. If you were part of a group health plan at work, you can keep that insurance for a while, but you have to pay for it yourself. This can be cheaper than buying insurance on your own. You have 60 days to decide if you want to keep your work insurance or not. The law only applies to certain employers and lasts for up to 18 months, but sometimes longer.
A more thorough explanation:
COBRA, or the Consolidated Omnibus Budget Reconciliation Act, is a federal law that allows employees and their families to continue their group health benefits under an employer's group health plan if their work situation changes. This means that if an employee loses their job, has their hours reduced, or gets divorced and loses coverage, they can still have access to health insurance through their former employer's plan.
For example, if John loses his job, he can choose to continue his health insurance coverage through COBRA. He will have to pay the full premium for his coverage, but he will still have access to the same health benefits he had while he was employed.
COBRA only applies to group health plans offered by private-sector employers with more than 20 employees, as well as to state and local governments. It does not apply to the federal government. Employers are required to notify eligible employees of their right to continued coverage, and employees have 60 days to decide whether to waive COBRA coverage or not. The continued coverage under COBRA lasts for 18 months but may be extended to 36 months under certain circumstances.
The purpose of COBRA is to ensure that employees who lose their jobs receive health insurance benefits. While the cost of coverage under COBRA can be high, it is often less expensive than coverage an individual would find on the open market because former employees get to pay the employer-negotiated group rate.