A group health plan offers health care coverage for employers, student organizations, professional associations, religious organizations, and other groups. Many employers offer group health plans to employees and their dependents as a benefit of working with that particular employer (medical benefits). The employer may pay for part or all of the insurance cost (premium).
When an employee leaves a job he or she may be eligible for continued health insurance as a result of the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA). This federal law protects employees and their families in certain situations by allowing them to keep his or her health insurance for a specified amount of time. The individual must, however, pay a premium to keep their insurance plan in effect. It is important to note that COBRA only applies under certain conditions, such as job loss, death, divorce, or other life events. The COBRA law usually applies to group health plans offered by companies with more than 20 employees. Some states have laws that require employers to offer continued health care coverage for people who do not qualify for COBRA. Each state’s insurance board can provide additional information.