CARD T261
COBRA Continuation Coverage
Temporary continuation of eligible group health coverage after specified events under federal rules. Beneficiaries may be required to pay the coverage’s cost.
How it works
Federal COBRA generally applies to covered employer group health plans with 20 or more employees, using statutory counting rules; some plans are exempt and state continuation laws may reach smaller employers. Termination other than gross misconduct or reduced hours usually permits 18 months. A qualifying disability extension can reach 29 months; specified dependent events can allow 36 months. Beneficiaries generally have at least 60 days to elect, measured from the later of coverage loss or the election notice, and 45 days after election for the initial payment. The usual charge can be up to 102% of plan cost; disability-extension rules can permit more. [12]
An eligible employee losing coverage after a layoff can elect temporary continuation, usually paying the full cost rather than only the former employee share.
COBRA is temporary group continuation, not an individual-policy conversion or a guarantee of employer-paid premiums.
CARD T262
Affordable Care Act (ACA)
A federal law establishing major health-coverage reforms. Its provisions affect matters such as enrollment, coverage standards, and consumer protections.
How it works
The Affordable Care Act (ACA) established major health insurance protections, including protections for preexisting conditions in affected coverage and dependent coverage generally to age 26 when child coverage is offered. Non-grandfathered individual and small-group plans must cover ten essential benefit categories: outpatient care, emergencies, hospitalization, maternity/newborn care, mental health/substance-use care, prescriptions, rehabilitation/habilitation, laboratory services, preventive/chronic-disease services, and pediatric care including dental and vision. Rehabilitation helps restore lost skills; habilitation helps develop skills not previously acquired. Bronze, Silver, Gold, and Platinum describe how costs are shared, not care quality. Their approximate 60%, 70%, 80%, and 90% actuarial values estimate the plan’s share of covered costs across a standard population, not each person’s bill. [13] [14] [15]
A Gold plan’s 80% actuarial value is a population-level estimate, not a promise to pay exactly 80% of every member’s bill.
ACA protections do not eliminate underwriting for every life, disability, or supplemental insurance product.
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Practice questions
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T261 · COBRA Continuation Coverage
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T262 · Affordable Care Act (ACA)
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Sources & further reading
Original explanations and practice scenarios informed by the following regulatory, legal, and product resources. State examples are not presented as nationwide deadlines or requirements.