What is it? COBRA is the acronym for a federal law passed in 1985 (Consolidated Omnibus Budget Reconciliation Act). It is designed to allow qualified employees and dependents to continue their medical coverage (at their expense) after termination of their employment. Typically it (the continuation period) lasts for 18 months but may be extended to 29 months (if determined to be disabled by Social Security Administration during the first 2 months of COBRA coverage) or even 36 months (if the COBRA qualifying event is divorce, legal separation, death of the employee, Medicare entitlement of the employee, or loss of dependent child status). A qualified dependent is a previously enrolled (not just eligible) spouse, dependent children of employees or their spouse, and children born to or adopted by the employee during the COBRA continuation period.
Which employers are subject to COBRA? Those with 20 or more employees who choose to provide medical coverage for their employees. Employers with fewer than twenty employees on at least 50 percent of their typical business days in the preceding year are exempt from COBRA's requirements. Part time employees are included in the tally but are counted as fractions of full time employees.