COBRA
Also known as: COBRA continuation coverage
COBRA — short for the Consolidated Omnibus Budget Reconciliation Act — is US legislation that gives employees the right to continue their employer-sponsored group health insurance for a set time after an event that would otherwise end it, such as resignation, redundancy, or a reduction in hours. The coverage is the same plan the person had while employed, and it typically lasts up to 18 months, sometimes longer for certain qualifying events.
The important feature of COBRA is cost. While employed, most US workers pay only part of their health-insurance premium because the employer subsidises the rest; under COBRA the former employee pays the entire premium plus a small administrative charge, which often makes it markedly more expensive than it felt during employment. COBRA exists because health insurance in the United States is largely tied to employment, so losing a job can otherwise mean an abrupt loss of medical cover.
COBRA is specific to the US health-insurance system and has no direct Indian counterpart, because health cover in India is not structured the same way. Indian employers commonly provide group medical insurance as a benefit, but continuation after leaving is generally handled by the employee taking out an individual policy or porting the group cover where the insurer permits, rather than through a statutory continuation right. For a GCC, this means US and Indian staff experience post-employment health cover very differently, which is worth noting when comparing benefits across a global workforce.
Frequently asked questions
What is COBRA?
COBRA is a US law that lets employees and their dependants keep their employer group health insurance for a limited period — usually up to 18 months — after leaving a job or losing coverage. The individual pays the full premium themselves.
Who pays for COBRA coverage?
Under COBRA, the former employee pays the entire health-insurance premium plus a small administrative fee, rather than the subsidised portion they paid while employed. This often makes COBRA noticeably more expensive than the same cover felt during employment.
How long does COBRA coverage last?
COBRA coverage typically lasts up to 18 months after a qualifying event such as leaving a job, though certain events can extend it to 36 months. It continues the same group health plan the person had while employed.
Is there an equivalent to COBRA in India?
India has no direct equivalent to COBRA, because health cover is not tied to employment in the same way. Indian employers usually provide group medical insurance, and continuation after leaving is generally handled by taking out or porting to an individual policy rather than a statutory right.