The Consolidated Omnibus Budget Reconciliation Act (COBRA)

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a law that the United States Congress passed in 1985. The Consolidated Omnibus Budget Reconciliation Act is aimed at helping employees who have lost their job. When an employee loses a job, all the health benefits she used to enjoy with that employer are gone.

In order to ease employees anxieties about health in the period of time when they are at their lowest level; The Consolidated Omnibus Budget Reconciliation Act gives workers the right to choose to continue the group health benefits offered in group health plan for fixed limited period of time. This is the essence of the Consolidated Omnibus Budget Reconciliation Act.

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Applicable to a wide variety of employees

The provisions of Consolidated Omnibus Budget Reconciliation Act are in place irrespective of whether the employee lost the job voluntary or involuntary, whether she worked for a reduced number of hours, whether the employee was actually between jobs at the time of the medical emergencies, was transitioning between jobs, or was facing divorce, death, or other life events. Consolidated Omnibus Budget Reconciliation Act allows coverage of up to 102 percent of the cost of the plan for Individuals that are eligible for this plan, provided they pay the entire premium.

COBRA has complete details of the ways by which employees and their family members may choose to be part of continuation coverage. Consolidated Omnibus Budget Reconciliation Act requires employees pay the premiums and also provide notice. In addition, employers are required to allow employees to continue with their existing group health coverage for a period of between one and a half and three years from the date of termination of employment, or reduction in working hours, whichever may be applicable.

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Difficulties associated with Consolidated Omnibus Budget Reconciliation Act

The Consolidated Omnibus Budget Reconciliation Act however, has some issues when it comes to administration. COBRA has a number of clarifications that relate to the core aspects. For example, for some plans, some kinds of family members are entitled to some kinds of COBRA benefits, while under some other plans, some other kinds of family members are entitled to some other kinds of benefits.

Different rules for different types of employees

The Consolidated Omnibus Budget Reconciliation Act also allows some kinds of employees to enjoy benefits for 18 months from the loss of the job, while other kinds of employees can enjoy the same for up to 36 months.

A task cut out for HR

These grey areas need to be cleared by organizations, because HR has to be clear on all these, if it has to ensure that organizations are following the right rules for COBRA implementation, failing which there could be expensive penalties. This requires a good level of understanding of the smaller details of the various provisions of The Consolidated Omnibus Budget Reconciliation Act.

Following some changes brought about to The Consolidated Omnibus Budget Reconciliation Act in 2009 by the Affordable Care Act; HR has to be doubly sure to understand the implications COBRA has in the light of these changes.