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Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

Last updated: January 6, 2018

What Does Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) Mean?

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) was passed by the U.S. Congress on a reconciliation basis. It was signed into effect by President Ronald Reagan. One of its important provisions is the stipulation that a group insurance program must allow some policyholders to maintain their health insurance coverage after quitting their job.

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Insuranceopedia Explains Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

COBRA introduced amendments to the Employee Retirement Income Security Act of 1974 (ERISA). It covers many subjects, including pensions, coverage for emergency room visits, and disability insurance. The COBRA statute became law on April 7, 1986.

Under COBRA, an individual covered by one policy is allowed to also get coverage from another group health plan or through Medicare if certain conditions are met. Qualifying employers are also not permitted to take a tax deduction for associated health insurance costs unless the health insurance plan allows their employees and the immediate family members of those employees to continue their health insurance coverage if they lose it as a result of a qualifying event.

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Health InsuranceDisability InsuranceGovernment RegulationsRetirementGroup Benefits

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