What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) provide for terminated employees?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that allows employees who have been terminated, or whose hours have been reduced, to continue their group health insurance coverage for a limited time. This provision is crucial for terminated employees as it ensures that they do not immediately lose their health insurance benefits during a potentially challenging transition period.

COBRA coverage generally lasts for up to 18 months, but in certain cases, it can be extended to 36 months, depending on specific circumstances. Employees are required to pay the full premium for the insurance, plus a small administrative fee, which can be a significant financial consideration but provides the continuity of care that is often vital during a job transition or for those seeking new employment.

The other options do not accurately represent COBRA's provisions. It does not provide permanent insurance coverage, free health services, or retirement benefits. COBRA is specifically focused on the temporary continuation of group health insurance, allowing individuals and their families to manage health care costs while they seek new employment or alternative health coverage.