What does COBRA allow former employees regarding their health insurance coverage?

COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, provides a crucial benefit for former employees by allowing them to maintain their employer-based health insurance coverage for a limited time after employment ends. This federal law was established to protect individuals and their families by ensuring they do not immediately lose health insurance when they leave a job or experience a reduction in work hours.

Under COBRA, eligible individuals can continue their existing health plan for up to 18 months, and in certain situations, coverage can extend up to 36 months. This continuation of coverage is particularly important during transitions when individuals may be seeking new employment or waiting for another insurance option to become available, such as through a spouse’s plan or individual coverage.

The other options do not accurately describe the provisions of COBRA or the benefits it provides. For instance, COBRA does not allow changes to health providers without losing coverage, nor does it offer lower premiums compared to what active employees pay. Additionally, COBRA does not facilitate automatic enrollment into different health plans; rather, it specifically extends the same coverage that the individual had while employed.