What is "COBRA" in relation to health insurance?

COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, is a significant piece of legislation that enables individuals to maintain their health insurance coverage after experiencing a job loss, reduction in work hours, or other qualifying events. Under this law, employees and their families may continue to receive benefits under their employer's group health plan for a limited period, typically up to 18 months, though in some cases, it can extend to 36 months.

This provision is essential because it provides a safety net for individuals who might otherwise lose their health insurance during periods of unemployment or transition. It ensures continuity of care, allowing former employees and their dependents to access the same health insurance benefits they had while employed, which can be crucial for managing ongoing medical needs or treatments.

Knowledge of COBRA is important for both employees and employers, as it affects the management of health benefits during employment transitions. By understanding this law, individuals can make informed decisions about their healthcare options when facing job changes.