What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) require from employers?

The correct answer highlights an essential aspect of the Consolidated Omnibus Budget Reconciliation Act (COBRA), which requires employers to extend group health insurance coverage to terminated employees and their families under specific conditions. This legislation was enacted to ensure that employees who lose their job—or face a reduction in work hours that affects their health insurance benefits—are not immediately left without health coverage. This extension allows former employees and their dependents to maintain their existing health benefits for a limited time, typically for up to 18 months, and in some cases, longer.

COBRA gives these individuals the right to continue the same health insurance plan they had while employed, albeit often at their own cost, which may be higher due to the loss of employer subsidies. This temporary extension is a crucial safety net designed to provide continuity of care during transitions and to prevent gaps in health coverage that could lead to undue financial hardship.

Other options do not accurately reflect the provisions of COBRA. For example, it does not stipulate that health insurance is provided only for current employees or mandate a reduction in premiums for all employees, nor does it require employers to provide insurance without a premium—individuals opting for COBRA coverage must generally pay the full premium for their health insurance.