Unemployment carries with it all of the mystery of Pandora’s box. Many unemployed beneficiaries are just now finding out that healthcare is not a given as the first checks roll out. Much of a laid-off worker’s healthcare coverage has to do with the spectrum of coverage from the his/her previous employer. For the vast majority of people out of work, the ability to maintain the same level of healthcare coverage has simply become too burdensome. At the tip of the post-unemployment iceberg is an entity whose rules characterize the inability for so many to receive coverage after a job loss — COBRA.

COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985) is a law passed by the U.S. Congress during the Reagan administration that, among other things, mandates an insurance program giving some employees the ability to continue health insurance coverage after leaving employment. It allows for coverage for up to 18 months in most cases. If the individual is deemed disabled, coverage may continue for up to 29 months. In the case of divorce, coverage may continue for up to 36 months. COBRA does not apply, on the other hand, if employees lose their benefits coverage because the employer has terminated the plan altogether or if the employer has gone out of business.

It also does not require the employer to pay for the cost of providing continuation coverage. Instead, it allows employees and their dependents to maintain coverage at their own expense by paying the full cost of the premium the employer previously paid, plus up to a 2% administrative charge (50% for the latter 11 months under the disability extension).

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