Definition of Cobra

COBRA is medical insurance provided to members of a specific health care plan who no longer have medical insurance due to some type of qualifying event. If a qualifying event occurs, the employee is granted COBRA for a specific amount of time, with both the employer and the employee paying a portion of the expense. Not all employees qualify for COBRA. Qualified beneficiaries for COBRA include an individual covered by a group health plan on the day before a qualifying event who is an employee, the employee’s spouse, or an employee’s dependent child for an employer who has 20 or more employees.

There are a variety of “qualifying events” which may cause an individual to lose their health care coverage. For instance, an employee is covered by COBRA if they face voluntary or involuntary termination of employment for reasons other than gross misconduct or they have had their hours of employment reduced. Spouses may also qualify for COBRA if their spouse is terminated for any reason other than gross misconduct, their spouse has a reduction in hours, their spouse becomes entitled to Medicare, they separate or divorce their spouse, or their spouse dies. COBRA was created under the Consolidated Budget Reconciliation Act of 1985, and specifically under Title X of the Act.

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