Consolidated Omnibus Budget Reconciliation Act (COBRA) 1986, is an insurance for those employees who are covered under an employer sponsored insurance plan with more than 20 employees. COBRA provides the same health insurance as the employee had while employed. COBRA is provided for those employees that leave an employer at will or by termination. You may only be eligible for COBRA if you are currently or were employed within 60 days of leaving the workplace. You are only eligible for COBRA if current employed, and no longer have health benefits, or unemployed.

The COBRA Act gives them the right to continue their health insurance coverage for up to 18 months. The employee will pay full premium. Once terminated from the employment the human resource department will send to the employee paperwork to begin the process for coverage under the COBRA plan. The employer will no longer pay for the coverage, the full cost will be paid by the employee. This can be very costly for some. The cost can be up to 102%.

The COBRA plan benefits are same as the original health insurance coverage that the employee had previously before his termination of employment.

When to Consider a COBRA Alternative