What Is COBRA?
COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, is a federal law that allows former employees to continue their employer-sponsored health insurance for a limited period after leaving a job. Coverage typically extends up to 18 months following termination, a layoff, or a significant reduction in work hours.
Understanding COBRA Coverage
Employers with 20 or more employees who offer group health insurance are legally required under COBRA to provide eligible workers the option to keep their health benefits after separating from the company. This applies whether an employee leaves voluntarily or involuntarily, including in cases of job loss or reduced work schedules.
In certain circumstances, such as divorce, death of the covered employee, or a dependent aging out of coverage, COBRA benefits may be extended up to 36 months.
COBRA is designed to provide a safety net, allowing individuals to maintain access to health services like prescription medications, dental care, and vision treatment during periods of transition. However, it typically does not include life or disability insurance coverage.
For businesses looking to manage COBRA compliance smoothly, working with a payroll and benefits partner like Beyond can simplify the process and ensure all obligations are handled accurately and on time.