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Consolidated Omnibus Budget Reconciliation Act of 1985

Ramona L. Paetzold


The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) amended Title I of the Employee Retirement Income Security Act of 1974 (ERISA) to require group health plan providers to allow employees and certain beneficiaries to extend their current health coverage in circumstances that would ordinarily result in loss of coverage. Group health plans include not only medical plans, but also vision care plans, dental plans, and prescription drug plans, even if self‐funded. Employers having fewer than 20 employees are exempt from COBRA's coverage. The Act identifies “qualifying events” that would otherwise result in loss of coverage for the employee or the employee's spouse or dependant child. These qualifying events include the death of the covered employee, a reduction in the employee's hours making him or her ineligible for continued coverage, the termination of the employee (except for gross misconduct), the divorce or legal separation of the covered employee and his or her spouse, the employee's eligibility for Medicare, and a child no longer being considered an eligible dependant under the plan. The period of transitional coverage is either 18 or 36 months, depending on the nature of the qualifying event. Proof of insurability cannot be required as a condition of the transitional coverage. COBRA coverage must be elected by the employee or qualified beneficiary; additionally, ... log in or subscribe to read full text

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