Consolidated Omnibus Budget Reconciliation Act, or COBRA, rules and regulations mandate that employers with group health plans must continue to provide the option of health coverage to employees, former employees, their spouses and their dependent children when qualifying events would otherwise cause them to lose coverage, reports the U.S. Department of Labor. The former employees must pay for the health coverage, and the length of the coverage depends on the nature of the qualifying event.
COBRA regulations apply to local governments, state governments and private-sector employers with at least 20 employees for over one-half the business year, as the U.S. Department of Labor explains. Part-time employees count as fractions of full-time employees for eligibility counts. Events that qualify employees for COBRA coverage include termination of employment, a reduction in working hours and eligibility for Medicare. Spouses become eligible through the covered employee's death, divorce or legal separation. Dependent children may qualify for coverage under COBRA when they lose dependent child status under the rules of the group health plan.
The law requires employers to provide information to employees about their rights under COBRA, according to the U.S. Department of Labor. As of 2015, beneficiaries have 60 days to elect to continue coverage after a qualifying event. Coverage includes all benefits under the normal group health plan, but COBRA-covered beneficiaries may pay higher premiums because they must pay both the employer and employee portions of the premiums in addition to a small administration fee. COBRA coverage may last between 18 and 36 months depending on the qualifying event.