What does COBRA stand for?

The correct answer is the Consolidated Omnibus Budget Reconciliation Act, commonly known as COBRA. This legislation was enacted in 1985 and provides for the continuation of health insurance coverage for individuals and their families after employment ends or after a significant reduction in working hours. The act specifically allows employees to maintain their employer-sponsored health coverage for a limited time, typically 18 months, and can extend up to 36 months for certain qualifying events, such as the death of the employee or divorce.

Understanding COBRA is crucial because it offers an important safety net for individuals who may otherwise lose their health insurance during transitional periods, such as job loss or changes in employment status. It is not related to other options that use different terms or do not accurately reflect the content and purpose of the law. COBRA directly addresses the need for temporary health coverage continuity following certain life events.