Health Insurance Continuation Coverage Under COBRA Page: 2 of 14
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Health Insurance Continuation Coverage Under COBRA
Most Americans with private group health insurance are covered through an employer, coverage
that is generally provided to active employees and their families, and may be extended to retirees.
A change in an individual's work or family status can result in loss of coverage. In 1985,
Congress enacted legislation to provide temporary access to health insurance for qualified
individuals who lose coverage due to such changes. Under Title X of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (COBRA, P.L. 99-272), an employer with 20 or more
employees must provide those employees and their families the option of continuing their
coverage under the employer's group health insurance plan in the case of certain events. The
coverage, usually for 18 months, can last up to 36 months, depending on the nature of the
triggering event. Employers who fail to provide the continued health insurance option are subject
Since the start of the recession in December 2007, the number of unemployed persons has
increased by 7.6 million to 15.1 million, and the unemployment rate has doubled to 9.8%. Many
of these individuals were eligible to continue their employer-sponsored health insurance, but did
not elect coverage under COBRA because of the cost. On average, employees pay 27% of the
premium for family coverage under an employer-sponsored health insurance plan. Those
extending coverage through COBRA can be required to pay up to 102% of the premium, which
averaged $13,643 for a family in 2009. Congress addressed this issue under Title III of the
American Recovery and Reinvestment Act (P.L. 111-5), which included a temporary 65% subsidy
for COBRA premiums. The subsidy is available to individuals who meet the income test and who
are involuntarily terminated on or after September 1, 2008, and before January 1, 2010.
The 111th Congress is currently considering whether to extend COBRA benefits beyond the
current coverage. Some argue that even with the subsidy, high premiums make COBRA coverage
unaffordable to many. Others maintain that in requiring employers to provide former employees
with the option of continuing their health insurance coverage, COBRA has resulted in extra costs
for employers (in the form of increased premiums for employers' group health insurance
policies), as well as added administrative burdens.
This report provides background information on continuation health insurance under COBRA and
on the COBRA population. It will be updated as events warrant.
Congressional Research Service
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Kinzer, Janet & Peterson, Meredith. Health Insurance Continuation Coverage Under COBRA, report, December 18, 2009; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc819130/m1/2/: accessed June 24, 2021), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.