The Consolidated Omnibus Budget Reconciliation Act (COBRA) was passed by the United States Congress in 1985. The legislation creates an insurance program for the purpose of allowing continued health care for employees for a specified period of time (which varies) after leaving a venue of employment.

Both the workers and the members of their immediate families who were covered by the health care plan provided by the previous employer may maintain that health care coverage if a qualifying event occurs which results in the loss of the coverage.

Instances of qualifying events include the death of the employee specifically covered by the health insurance or a reduction in hours worked. This reduction may be due to the resignation of the employee, their discharge or firing from the job, a layoff, or labor union activity such as a strike or lockout. Other qualifying events include medical leave, a slow down in the operation of the business, divorce, or a dependent child attaining sufficient age to lose coverage under the terms of the plan.

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