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The Consolidated Omnibus Budget Reconciliation Act (COBRA) was
passed in 1986. The law provides continuation of group health
coverage that otherwise would be stopped. COBRA contains provisions
giving qualified former employees, retirees, spouses and dependent
children the right to temporary continuation of health coverage
at group rates.
The law covers group health plans maintained by employers with
20 or more employees in the prior year. It applies to plans in
the private sector and those sponsored by state and local governments.
The law does not apply to the following: Small employers - with
fewer than 20 employees, plans sponsored by the Federal government,
Church plans, Any employer that has a plan that is not a group
health plan within the meaning of COBRA.
Under COBRA, a group health plan ordinarily is defined as a
plan that provides medical benefits for the employer's own employees
and their dependents through insurance or otherwise (such as a
trust, health maintenance organization, self-funded pay-as-you-go
basis, reimbursement or combination of these). Medical benefits
provided under the terms of the plan and available to COBRA beneficiaries
may include:
- Inpatient and outpatient hospital care
- Physician care
- Surgery and other major medical benefits
- Prescription drugs
- Any other medical benefits, such as dental and
vision care
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