What Are COBRA Insurance Rules?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) was designed to give workers and their families who lose their health benefits the ability to continue receiving group health benefits provided by their group health plan. COBRA insurance rules state that coverage is only provided for a limited period of time and the worker must meet certain requirements such as: being subject to voluntary or involuntary job loss, experiencing a reduction in the hours worked, is transitioning between jobs or has been involved in a death, divorce or other life events.

The COBRA legislation generally requires that group health plans have been sponsored by employers for 20 or more employees in the prior year. If this condition is met they can offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) where coverage under the plan would otherwise end.