The COBRA is an act passed in 1985 that offers employees health coverage when they lose their job.
The COBRA plan also covers the employee’s families.
COBRA plan applies to health coverage offered by private sector employers only with more than 20 employees.
The COBRA coverage begins on a day after the employee loses his/her job. An employee must be given 60 days time period to decide whether to accept or decline the coverage.
When an employee accepts the coverage then the first payment is made by the employer after that it’s the employee’s responsibility to pay the premium to keep the coverage effective.
The COBRA plan allows coverage for 18 months. It can be extended for 36 months for the spouse in case of divorce or the death of an employee.
When an employer loses his business then COBRA coverage does not apply.
