Consolidated Omnibus Budget Reconciliation Act

Written by Jacey Harmon
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COBRA, an acronym for Consolidated Omnibus Budget Reconciliation Act, was enacted in 1986 and provides for the protection of employee health insurance coverage. The law calls for employers to offer temporary health coverage extensions when coverage would otherwise terminate. Employees that lose health coverage due to voluntary or involuntary job loss, changing of a job or reduction of hours have the ability to receive extended health coverage.

The law provides scenarios where a person or family has the right to keep group health coverage. Divorce or legal separation, death of the covered individual, or loss of job represent a few of the situations that call for extended coverage. The length of time extended coverage is available depends on the situation that created the loss of coverage. An example, a spouse of a deceased employee is entitled to 36 months of continued coverage under the group health plan.

COBRA Education

Laws are very complex entities that provide loopholes, exemptions, and definitions. Unfortunately, if one is found not to be compliant with government regulations ignorance is not a solid defense. It is imperative that organizations have staff members that are proficient or at least have a basic understanding of COBRA regulations. Having a staff that is knowledgeable in COBRA will limit the exposure the organization may have to possible government repercussions.

There are several training classes available that educate individuals about COBRA rules, regulations, and amendments. These classes will educate individuals about the definitions, scenarios and notification practices that are found in the law. Insurance professionals can utilize COBRA classes to meet continuing education requirements set forth by regulating agencies. Maintaining a current interpretation of the law will ensure an organization's compliance and reduce the risk of non-compliance.


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