Consolidated Omnibus Budget Reconciliation Act - COBRA

AAA

DEFINITION of 'Consolidated Omnibus Budget Reconciliation Act - COBRA'

A landmark federal law passed by Congress in 1986 that provides continuing coverage of group health benefits to employees and their families upon the occurrence of certain qualifying events where such coverage would otherwise be terminated. The qualifying events under which COBRA continuation health coverage can be extended include voluntary or involuntary job loss, reduction in hours worked, job transition, death, divorce and other life events. Group coverage under COBRA may be extended for a maximum of 18 months due to employment termination or reduction of hours worked, though coverage may be extended to 36 months under certain circumstances. COBRA covers health plans maintained by employers with more than 20 employees.

INVESTOPEDIA EXPLAINS 'Consolidated Omnibus Budget Reconciliation Act - COBRA'

COBRA continuing coverage is meant to provide an element of financial security to workers who would otherwise lose coverage because of a layoff, divorce or other event. COBRA participants may be required to pay the full premium for health coverage up to 102% of the plan cost. While COBRA coverage is therefore more expensive than coverage for active employees, for whom the employer generally pays a portion of the premiums, it is still more economical than individual health plans.

RELATED TERMS
  1. Preferred Provider Organization ...

    A type of health insurance arrangement that allows plan participants ...
  2. Group Health Insurance Plan

    An insurance plan that provides healthcare coverage to a select ...
  3. Severance Package

    A bundle of pay and benefits offered to an employee upon being ...
  4. Health Insurance

    A type of insurance coverage that pays for medical and surgical ...
  5. Accident And Health Benefits

    Fringe benefits provided to employees for sickness, accidental ...
  6. Portable Benefits

    Benefits that have been paid into or accrued in an employer-sponsored ...
Related Articles
  1. What You Need To Know About COBRA Health ...
    Insurance

    What You Need To Know About COBRA Health ...

  2. The Layoff Payoff: A Severance Package
    Personal Finance

    The Layoff Payoff: A Severance Package

  3. Keep Working Or Stay At Home With The ...
    Retirement

    Keep Working Or Stay At Home With The ...

  4. How Unemployment Affects You (Even If ...
    Retirement

    How Unemployment Affects You (Even If ...

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center