COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, a federal law that allows certain individuals to continue their employer-sponsored health insurance after a qualifying event that would normally cause them to lose coverage.
🏢 Who Must Offer COBRA?
COBRA applies to employers that:
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Have 20 or more employees on more than 50% of typical business days in the previous calendar year
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Offer a group health plan
Most private-sector employers and state/local governments are subject to COBRA. Churches and federal employers are typically exempt (federal employees have separate continuation rules).
👥 Who Can Get COBRA?
COBRA coverage is available to:
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Employees who lose group coverage due to termination (voluntary or involuntary) or reduction in hours
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Spouses and dependent children who lose coverage due to divorce, death of the employee, or aging out of dependent status
These individuals are called qualified beneficiaries and must have been covered under the group health plan the day before the qualifying event.
🧠 Key Points:
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COBRA is not a separate insurance plan—it’s a continuation of the same group plan
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Qualified beneficiaries must elect coverage and pay the full premium (plus a 2% admin fee)
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Employers are required to provide COBRA notices and election rights in a timely manner