COBRA

8 Health Care Glossary Items #5

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) was passed to allow employees to keep their insurance after their term of employment ends at a company. It is often an important stop-gap measure that gets an individual from the end of one job to the beginning of their next job without losing their health insurance coverage.

After losing a job, an individual can keep their health insurance policy for up to 18 months. To do so, they are required to pay the same premium that their employer previously paid along with a 2% administrative fee. Failure to pay on time will result in a loss of coverage and render the individual ineligible for COBRA.

Unfortunately, many Americans cannot afford to pay the premiums on their own, so they are not able to take advantage of COBRA coverage.