CAS-OB Law
CAS-OB law is an acronym for the Consolidated Omnibus Budget Reconciliation Act of 1986. It is an act that offers coverage for medical and dental costs to people who lose their job or voluntarily leave their job without severance. This law gives the insurance holder a chance to continue benefits at the same cost they were paying while they were employed. This includes coverage of dependent children who are under the age of 26.
The Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) is a federal law that was enacted by Congress to protect employees from the lack of benefits and continuity of care when they experience a job loss. The intent of COBRA is to allow a former employee to keep their group health plan in place for up to 18 months following the involuntary termination or voluntary resignation from their job. This helps workers bridge the time and financial gap until they are able to obtain health insurance from another source.
Who Qualifies for COBRA?
COBRA eligibility applies to everyone enrolled in a group health plan who experiences any of the following:
The involuntary termination of employment
Reduction of hours on the job
Voluntary resignation
Divorce or death of the plan holder
The beginning of a worker’s Medicare benefits
The employee’s eligibility must be continuous, meaning they cannot go more than 63 days without health coverage to qualify. Coverage also includes dependent children, who can remain on the coverage plan until they turn 26.
What Does COBRA Cover?
COBRA generally covers all the same health care benefits that were provided under the previous employer’s plan. It will typically include:
• Doctor visits
• Specialty care
• Lab work
• Emergency room visits
• Maternity care
• Mental health services
• Prescription drugs
• Diagnostic tests
• Durable medical equipment
• Vision and dental care
COBRA Is an Affordable Option
COBRA is often the most affordable option for health care coverage for those who have lost their job. Under the law, the employer is required to pay for its portion of the health plan premiums and the employee is required to cover the remaining cost. Because employers usually pay a significant portion of the monthly premiums, this coverage can be much more affordable than options available in the open market.
COBRA Is a Temporary Option
The Consolidated Omnibus Budget Reconciliation Act of 1986 is a temporary option, meaning that coverage is available for only a limited amount of time. In most cases, a covered individual will be eligible for up to 18 months of healthcare coverage. During this time, the employer is not responsible for paying any of the premiums. At the end of this period, coverage must be terminated or transitioned to another health plan.
The Affordable Care Act and COBRA
The Affordable Care Act (ACA) has extended the period of time for which a person can remain on their COBRA coverage from 18 months when the law first went into effect in 2010, to now 36 months. This extension of coverage applies to anyone who enrolled in a COBRA plan before March 31, 2020.
In addition, subsidies are now available for those who qualify based on income and employment status. Individuals making up to 400% of the federal poverty level are eligible to receive premium tax credits to offset the cost of COBRA. For example, if an individual making an annual salary of $50,000 qualifies for a tax credit of $600, the amount that person needs to pay each month for COBRA coverage could be reduced from $750 to $150.
Final Thoughts
COBRA coverage is often the most affordable option for those who have been laid off or voluntarily left their job and need health care coverage until they can find another solution. Those who qualify for the Consolidated Omnibus Budget Reconciliation Act of 1986 can continue receiving the same benefits for up to 36 months with subsidies available to help defray the cost of premiums. It’s important to understand the qualifications and key aspects of COBRA to make an informed decision about your health care.
