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What Is Cobra?

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