California Property & Casualty Broker-AgentHealth InsuranceEasy
A client is concerned about losing their health insurance coverage if they leave their current employer. They want to understand the federal law that allows them to continue their group health benefits for a limited period. Which federal act provides this protection?
- AHealth Insurance Portability and Accountability Act (HIPAA)
- BConsolidated Omnibus Budget Reconciliation Act (COBRA)
- CMedicare Modernization Act (MMA)
- DAffordable Care Act (ACA)
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 time after certain qualifying events, such as job loss, divorce, or death of the primary insured.
Why the other options are wrong
- A. HIPAA primarily deals with health information privacy and portability but not direct continuation of group benefits after job loss.
- C. MMA primarily created Medicare Part D (prescription drug coverage).
- D. ACA reformed health insurance markets but is not primarily about continuation of *employer-sponsored* coverage after job loss.
COBRA
Consolidated Omnibus Budget Reconciliation Act; a federal law that allows employees and their families to continue group health benefits for a limited time after certain qualifying events.
- Applies to employers with 20 or more employees.
- Coverage is typically for 18 or 36 months.
- The individual usually pays the full premium plus an administrative fee.
Memory trick: COBRA slithers in to save your coverage after you leave your job.