What is the primary purpose of the Consolidated Omnibus Budget Reconciliation Act (COBRA)?

The primary purpose of the Consolidated Omnibus Budget Reconciliation Act (COBRA) is to provide terminated employees access to group insurance. This federal law allows individuals to continue their health insurance coverage after job loss, reduction of work hours, or other qualifying events that would otherwise end their eligibility for employer-sponsored health benefits. By opting for COBRA coverage, former employees can maintain access to their group health insurance plan, thereby preventing gaps in health coverage during transitions to new employment or other life situations.

COBRA is particularly significant because it lays out the framework for how long an individual may be able to maintain this coverage (typically up to 18 months, with some scenarios allowing for longer periods) and stipulates that employers must inform employees of their rights to this continuation of coverage. This protection is a key part of the law, emphasizing the importance of continued health insurance during times of job instability, which can significantly impact an individual's financial and health security.