Describe the Consolidated Omnibus Budget Reconciliation Act of 1985

Question

What will be an ideal response?

Answer 1

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) ensures that employees who lose their jobs or have their hours reduced to a level at which they are no longer eligible to receive medical, dental, or optical benefits can continue receiving benefits for themselves and their dependents under the employer's policy. By paying the premiums for the policy, plus up to a 2 percent administration fee, employees can maintain the coverage for up to 18 months, or 29 months for a disabled worker. Employees have 60 days after their coverage would ordinarily terminate to decide whether to maintain the coverage.
This obligation does not arise if the employee was fired for gross misconduct or if the employer decides to eliminate the benefit for all current employees. Employers who refuse to comply with the law may be required to pay up to 10 percent of the annual cost of the group plan or $500,000, whichever is less.