COBRA

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, which became law in 1986. COBRA gives you the right to choose to temporarily keep the group health insurance benefits that you would otherwise lose after you reduce your working hours, quit your job, or lose your job. It also lets family members choose to keep health insurance after your job loss or other qualifying event that would normally cause them to lose the coverage they have through your employer. COBRA applies to nearly all employers with 20 or more employees.

Why was COBRA created?
Before this law went into effect, when employees left their companies, they and any covered family members lost their health insurance immediately. If the employee or a family member were ill, they were often not able to get new health insurance because they were already sick. COBRA allows an employee to buy health insurance through the employer even though the person no longer works there or no longer works full time.

ARRA
Extra help for some people came through with the economic stimulus package signed into law February 17, 2009 (known as the American Recovery and Reinvestment Act of 2009). It pays part of the COBRA premium for people who lost their jobs, but only if they meet certain requirements. See the section below, “Can I get extra help if I lost my job between September 1, 2008 and December 31, 2009?” for more details.