Consolidated Omnibus Budget Reconciliation Act (COBRA)

Back in 1986 Congress passed landmark health care legislation, designed to protect workers who'd been deprived of health insurance benefits either by virtue of job loss or reduction of hours that has come to be commonly known by its acronym COBRA. The "Consolidated Omnibus Budget Reconciliation Act" simultaneously amended the earlier Public Health Service, the Internal Revenue Code and ERISA or the Employee Retirement Income Security Acts to provide the public with continual access to group sponsored health coverage benefits in circumstances wherein it would be terminated otherwise.

The COBRA health insurance act includes a variety of provisions aimed at ensuring that spouses, dependent children, retirees and select former employees would have the right to and more importantly a simplified means of acquiring temporary health care insurance coverage at group plan medical indemnity rates. Unfortunately however, the group healthcare coverage options commonly available through COBRA plans are typically more costly for their participants than the health care policies available to employee group plan members, because employers are no longer shouldering a portion of the indemnity premium load.

However, that doesn't mean that COBRA plans aren't substantially less expensive for disenfranchised healthcare consumers to buy in to and maintain than individual health insurance.

Consolidated Omnibus Budget Reconciliation Legislation typically provides only for the continuing healthcare protection of consumers enrolled in employee health programs sponsored by state and or local governmental bodies or those maintained by private sector businesses that employed more that twenty persons in the previous calendar year. But, the COBRA laws are not applicable to health care plans sponsored and or maintained by either most religious organizations or the Federal government.

Group care health indemnity coverage plans sponsored and or maintained by employers in the private sector, are generally welfare benefit programs governed by the aforementioned Employee Retirement Income Security Act (ERISA) and therefore subject to its reporting and disclosure requirements, enforcement provisions and fiduciary standards. The ERISA act establishes neither a minimum standard nor benefit eligibility norms for welfare plans nor does it work so as to mandate the levels or types of health benefits open to the plan's participants.

It does, however, require that said plans maintain standards and practices that clearly establish how and when employees will be entitled to benefits. Under COBRA established plans, group health coverage is customarily defined as a plan providing health and medical care benefits to a company's employees as well as their spouses and or dependents either through standardized health insurance or by any means ranging from HMO's or health maintenance organizations, trusts, self-funded or pay-as-you-go plans, reimbursement or by means of some combination of the above.

Health care benefits provided for under the conditions of the policy available to COBRA plan beneficiaries may include:

• Both standard Inpatient and specialized outpatient hospitalization and care.
• Primary care giver or general practitioner physicians care.
• Emergency care, alternative medical needs, specialist health care providers, surgery and additional major medical benefits as well.
• Prescription drugs related or other pharmaceutical costs and or expenses.
• Other health and major medical benefits, such as vision or dental care.

Deciding whether or to participate in COBRA insurance will call for consumers to make a number of important decisions. There may be several standardized deductible. In general, higher deductible levels will translate in lower costs for participants. By rule of law, consumer's former employers must give them the option to roll over their healthcare coverage and to by into a COBRA insurance plan within thirty days. Participants have the option to purchase COBRA health insurance coverage in thirty day increments up to a program maximum of one-hundred and eighty days.