The landmark COBRA health benefit provisions became law in 1986. The law amends the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code and the Public Health Service Act to provide continuation of employer-sponsored
group health coverage that otherwise might be terminated.
COBRA contains provisions giving certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. This coverage, however, is only available when coverage is lost
due to certain specific events. Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since usually the employer pays a part of the premium for active employees while COBRA
participants generally pay the entire premium themselves. It is ordinarily less expensive, though, than individual health coverage.
The law generally covers group health plans maintained by employers with 20 or more employees
in the prior year. It applies to plans in the private sector and those sponsored by state and local governments. The law does not, however, apply to plans sponsored by the Federal government
and certain church-related organizations. ( The Federal Employees Health Benefit Program is
subject to generally similar, although not parallel, temporary continuation of coverage provisions under the Federal Employees Health Benefits Amendments Act of 1988). Under COBRA, a group health plan ordinarily is defined as a plan that provides
health care benefits for the employer's employees and their dependents through insurance or another mechanism such as a trust, health maintenance organization, self-funded pay-as-you-go basis, reimbursement or
Health care benefits provided under the terms of the plan and available to COBRA beneficiaries
Inpatient and outpatient hospital care
Surgery and other major medical benefits
Any other health care benefits, such as dental and vision care.
Life insurance, however, is not covered under COBRA.
The Centers for Medicare & Medicaid Services, Department of Health and Human Services, has advisory jurisdiction with respect to COBRA as it applies to state and local governmental employers and their group health plans.The Pension and Welfare
Benefits Administration, Department of Labor, and the Internal Revenue Service, Department of the Treasury, share jurisdiction with respect to COBRA as it applies to private sector employers and their
group health plans. The Office of Personnel Management has jurisdiction with respect to similar continuation of coverage provisions that apply to agencies of the Federal Government. (See
Role of Federal Government/More Information).
What You Need to Know
Individuals who work for a state or local government employer, and their dependents, should be aware of their rights regarding COBRA. Workers need to be aware of changes in health care laws
to preserve their benefit rights. A good starting point is reading your summary plan description
(SPD) booklet, if a state or local governmental employer distributes an SPD to its employees. Most of the specific rules on COBRA rights can be found there or with the person who manages your
health benefits plan. Also, be sure to contact the health plan periodically to find out about any
changes in the type or level of benefits offered by the plan. Detailed information regarding various aspects of COBRA can be found by clicking on the links below.
Who is Entitled to Benefits?
Role of the Federal Government/More Information