Wisconsin Accident and Health Insurance Practice Exam

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) applies to employers that have 20 or more employees. This legislation is designed to provide continuing health insurance coverage to employees and their families in the event of job loss, reduction in hours, or other specified events that would allow them to lose their employer-sponsored health insurance.

The stipulation of a minimum of 20 employees is significant because it reflects the intent of the law to assist individuals in larger employment sectors, where health benefits are typically offered as part of the overall employment package. By setting this threshold, COBRA ensures that employees in larger organizations have access to continued health coverage during transitional periods in their employment status. Smaller employers are not required to comply with COBRA, although they may choose to provide similar benefits voluntarily.

It's important to recognize that the threshold of 20 employees is specific to the federal provisions of COBRA, and certain state laws may have different requirements for smaller employers.