What is the primary purpose of COBRA for employees?

The primary purpose of COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, is to allow continuation of health insurance for employees and their families after certain qualifying events. This federal law ensures that individuals who lose their employer-sponsored health coverage due to events such as job loss, reduction in hours, transition between jobs, death, divorce, or other life events can retain their health insurance benefits for a limited period, typically up to 18 months.

This continuation of coverage is crucial as it provides employees with access to necessary medical care and protects them from potential gaps in insurance during transitions. COBRA is particularly important because losing a job or experiencing a life change often coincides with increased healthcare needs. By allowing individuals to maintain their health coverage, COBRA helps ensure they do not face financial hardship due to unexpected medical expenses during such vulnerable times.

Other options do not accurately capture the core intent of COBRA. Reducing costs or facilitating retirement planning pertains to different aspects of employment or benefits management, while job placement assistance is unrelated to the continuation of health benefits provided through COBRA.