What is COBRA designed to do?

COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, is a federal law that provides individuals and families the right to continue health insurance coverage under their employer's group plan for a limited period after certain events that would otherwise result in loss of coverage. These events can include job loss, reduction in hours, transition between jobs, death, divorce, and other life changes.

The primary objective of COBRA is to allow former employees and their dependents to maintain their health benefits to ensure that they do not experience a gap in coverage during times of financial or professional transition. This is particularly crucial, as losing employer-sponsored health insurance can lead to significant healthcare access issues and can place a heavy financial burden on individuals and families who may have ongoing medical needs.

By allowing continued health insurance coverage, COBRA helps to prevent abrupt coverage loss, enabling individuals to safely transition to new employment or arrangements without the immediate risk of being uninsured.