Consolidated Omnibus Budget Reconciliation Act (COBRA) | Keka HR

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Consolidated Omnibus Budget Reconciliation Act (COBRA)

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    What is Consolidated Omnibus Budget Reconciliation Act (COBRA)?

    The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law enacted in 1986 that allows employees and their families to continue their group health insurance coverage for a limited period under specific conditions, such as job loss, reduction in work hours, death, divorce, and other events.

    COBRA ensures that employees and their families do not abruptly lose health coverage during critical life changes.

    Let’s explain this with an example. John was laid off by his employer, ABC Corp. Soon after, he received a notice of his COBRA rights. To protect his family and himself from unfortunate events, he elected COBRA coverage. He continued to receive the same medical benefits for the next 18 months while he searched for new employment.

    cobra act

    Here is a table explaining the qualifying events and the timelines, as specified under COBRA:

    Qualifying Event  Qualified Beneficiaries  Maximum Period of Continuation Coverage 
    Termination (for reason other than gross misconduct) or reduction of employment hours  Employee 

    Spouse 

    Dependent Child 

    18 months 
    Employee enrollment in Medicare  Spouse 

    Dependent Child 

    36 months 
    Divorce or legal separation  Spouse  

    Dependent Child 

    36 months 
    Death of employee  Spouse  

    Dependent Child 

    36 months 

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