Consolidated Omnibus Budget Reconciliation Act 1986

Applies :

• Applies to all organisation that have 20+ employees, who provides group health care coverage
• Applies also to state and local govt.

COBRA Rule:

• 30 days - Employer need to inform employee about the availability of COBRA coverage within 30 days of occurrence
  
• 60 days - Qualified beneficiaries is given 60 days notice to elect coverage under COBRA.

Qualifying event and Period of coverage

• Termination ------ 18 months
• Reduction in Hour----- 18 months
• Death ------- 36 months
  
• Divorce -------- 36 months
  
• Legal Separation ------ 36 months
• Termination or reduction in hours of work due to disablement ----- 29 months
• Employee become eligible to medicare -------- 36 months
• Employee's child loses dependable status ------- 36 months

Payments for health coverage:

• Employer may charge upto 102 % of the group premium for the coverage
• If no payment are made, employer may discontinue COBRA coverage within 30 days of time they are due

Exception :

No COBRA coverage are given in case of termination of service due to misconduct

Discontinuation of COBRA:

• when the employee or dependent ceases to pay the premium
• Become eligible to medical insurance from the other new employer
• gains medicare coverage
• when the employer terminates its health care coverage( when goes out of business)