Consolidated Omnibus Budget Reconciliation Act ( COBRA )

Definition

Law which amends the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code and the Public Health Service Act to provide temporary continuation of group health coverage that otherwise might be terminated, to certain former employees, retirees, spouses, former spouses, and dependent children. Coverage is  at group rates.

Eligible individuals must have lost coverage due to a qualifying event and have been enrolled in their employer's health plan when working. 

Generally, group health plans for employers with 20 or more employees in the previous calendar year are subject to COBRA.

Referring Cite

IRC § 4980B, Revenue Ruling 2003-70,  IRS Publication 4181,

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