If the individual is deemed disabled by the Social Security Administration, coverage may continue for up to 29 months. See DOL.GOV's FAQs For Employers About COBRA Continuation Health CoverageĬOBRA does not apply if coverage is lost because the employer has terminated the plan altogether or because the employer has gone out of business.ĬOBRA allows for coverage for up to 18 months in most cases. COBRA imposes different notice requirements on participants and beneficiaries, depending on the particular qualifying event that triggers COBRA rights. Īmong the "qualifying events" listed in the statute are loss of benefits coverage due to (1) the death of the covered employee (2) an employee loses eligibility for coverage due to voluntary or involuntary termination or a reduction in hours as a result of resignation, discharge (except for "gross misconduct" ), layoff, strike or lockout, medical leave, or slowdown in business operations (3) divorce or legal separation that terminates the ex-spouse's eligibility for benefits or (4) a dependent child reaching the age at which he or she is no longer covered. A qualifying employer is generally an employer with 20 or more full-time-equivalent employees. However, the legislation was subsequently amended to instead impose an excise tax upon an employer whose health plan fails to satisfy the applicable rules. Because of the discrepancy between the official name of the Act and the year in which it was enacted, some government publications refer to the Act as the Consolidated Omnibus Budget Reconciliation Act of 1986.Īs originally enacted, Title X of the Act provided that a qualifying employer will not be permitted to take a tax deduction for its health insurance costs unless its health insurance plan allows employees of the employer and the employee's immediate family members who had been covered by a health care plan to maintain their coverage if a "qualifying event" causes them to lose coverage. Tooltip Public Law (United States) 99–272, 100 Stat. The violation for failing to meet those criteria was subsequently changed to an excise tax.Īlthough this statute became law on April 7, 1986, its official name is the Consolidated Omnibus Budget Reconciliation Act of 1985 ( Pub. The law deals with a great variety of subjects, such as tobacco price supports, railroads, private pension plans, emergency department treatment, disability insurance, and the postal service, but it is perhaps best known for Title X, which amends the Internal Revenue Code and the Public Health Service Act to deny income tax deductions to employers (generally those with 20 or more full-time equivalent employees) for contributions to a group health plan unless such plan meets certain continuing coverage requirements. ![]() ![]() COBRA includes amendments to the Employee Retirement Income Security Act of 1974 (ERISA). Congress on a reconciliation basis and signed by President Ronald Reagan that, among other things, mandates an insurance program which gives some employees the ability to continue health insurance coverage after leaving employment. The Consolidated Omnibus Budget Reconciliation Act of 1985 ( COBRA) is a law passed by the U.S.
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