What is the purpose of the Consolidated Omnibus Budget Reconciliation Act (COBRA)?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is specifically designed to allow employees and their families to continue group health insurance coverage after they lose their eligibility due to certain qualifying events, such as job loss, a reduction in work hours, or other changes in employment status. This law mandates that employers with group health plans offer continued coverage for up to 18 months (and sometimes longer, depending on specific circumstances) under the same plan, although the individual is usually responsible for paying the full premium.

This provision serves as a crucial safety net, ensuring that individuals do not experience a gap in health insurance coverage during times of transition, which can help maintain access to necessary medical services. The flexibility COBRA provides is essential in situations where sudden loss of income is accompanied by the risk of losing health insurance, allowing affected individuals to manage their health care needs without interruption.

While other options may suggest various benefits related to health insurance, they do not accurately reflect the primary purpose of COBRA, which focuses specifically on the continuation of coverage following the loss of eligibility.