Life & Health Insurance Exam (National Portion)Federal RegulationsEasy
A small business with 18 employees offers a group health plan. One of its employees, Mark, is involuntarily terminated due to a company downsizing. Mark was covered under the company's health plan for 10 years. Under which federal regulation might Mark be eligible to continue his health coverage?
- AEmployee Retirement Income Security Act (ERISA)
- BConsolidated Omnibus Budget Reconciliation Act (COBRA)
- CHealth Insurance Portability and Accountability Act (HIPAA)
- DGramm-Leach-Bliley Act (GLBA)
Show answer & explanationAnswer & explanation
Correct answer: B. Consolidated Omnibus Budget Reconciliation Act (COBRA)
COBRA allows employees and their families to continue group health benefits for a limited period under certain circumstances, such as job loss. The company size (18 employees) generally falls within the COBRA applicability threshold.
Why the other options are wrong
- A. ERISA sets minimum standards for most private industry retirement and health plans but does not directly govern continuation of coverage after termination.
- C. HIPAA primarily addresses health insurance portability and privacy, not continuation of coverage due to job loss.
- D. GLBA focuses on financial institutions' handling of private information, not health insurance continuation.
COBRA Eligibility
COBRA allows certain employees and their families to continue group health benefits offered by their former employer for a limited time after a qualifying event.
- Applies to employers with 20 or more employees (some states have 'mini-COBRA' for smaller employers).
- Qualifying events include termination, reduction in hours, divorce, death of an employee.
- Continuation is temporary, usually 18 or 36 months, and the beneficiary pays the full premium plus an administrative fee.
Memory trick: HIPAA protects, COBRA connects, ERISA inspects, GLBA respects.