COBRA (Consolidated Omnibus Budget Reconciliation) Plan in Medical Billing

• 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.