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Explaining the Consolidated Omnibus Budget Reconciliation Act

In 1974, the Employee Retirement Income Security Act (ERISA) was enacted by the United States government. This piece of legislation offers guidelines and requirements that employers, insurance companies and employees can follow when it comes to administering employee benefit plans. ERISA does not cover any plans offered to employees of churches or health plans offered by government agencies. Let's look at a specific amendment to ERISA.

One of the most important amendments to ERISA came in 1985 with the creation of the Consolidated Omnibus Budget Reconciliation Act (COBRA). This amendment to ERISA provides employees who are relieved of their duties or resign from their place of employment health coverage for a specific period.

In order for someone to qualify for coverage under COBRA, he or she must meet the following requirements:

  • The benefits they have must be subject to the ERISA policies
  • You must qualify as a beneficiary
  • The loss of your benefits must fall under a qualifying event

Your spouse can receive coverage under COBRA if they meet the following requirements:

  • The spouse is now qualified for Medicare
  • You and the spouse are now divorced or separated
  • The spouse who was covered under COBRA has passed away

Any children who are beneficiaries of a parent covered under COBRA can be covered as well, unless they have lost their beneficiary status based on the rules set forth by the plan.

You need to have an understanding of ERISA and the COBRA amendment so that you know what it is you deserve from your employer. Make sure you pay attention to your pay stubs and benefit information so that you are not missing out on anything your employer should be providing.

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Costello & Mains, LLC

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Mount Laurel, NJ 08054

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