Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 — a federal law giving workers and their families who lose their health insurance
benefits after leaving a job the right to continue receiving those benefits.
COBRA requires that group health insurance plans sponsored by employers with 20
or more employees in the prior year offer employees and their families an
opportunity for a temporary, 18-month extension of health coverage, when such
coverage would normally end. Qualified individuals must pay the entire premium
that would otherwise be paid by the employer, plus a 2 percent administrative
fee. Generally, only about 10 percent of workers eligible for COBRA benefits
elect them, usually because they are unable to afford the cost following the
loss of a job.