Guide to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
Introduction
_The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)_ is a crucial federal law that affects both employers and employees by providing continuation of health insurance coverage under certain circumstances.
Why It Is Important
COBRA is important because it ensures that employees and their families do not lose their health insurance coverage due to specific qualifying events such as job loss, reduction in hours, or other life events.
What It Is
COBRA is a federal law that requires employers with 20 or more employees to offer continuation of group health insurance plans to eligible employees and their dependents for a limited period after a qualifying event.
How It Works
When a qualifying event occurs, COBRA allows eligible individuals to continue their existing health insurance coverage for up to 18 months (and in some cases longer). The individual typically pays the full premium, including the portion previously covered by the employer.
Exam Tips: Answering Questions on COBRA
Understand Key Provisions: Familiarize yourself with the eligibility criteria, qualifying events, duration of coverage, and the cost structure.
Use Case Scenarios: Practice applying COBRA rules to different scenarios to understand how the law functions in various situations.
Stay Updated: Be aware of any amendments or changes to COBRA that may affect its application.
Focus on Definitions: Clearly define terms like 'qualifying event,' 'eligible employee,' and 'continuation coverage' in your answers.
Organize Your Answers: Structure your responses logically, starting with defining COBRA, explaining its importance, how it operates, and then addressing the specific question.