Health Insurance Portability and Accountability Act (HIPPA) Practice Exam

COBRA is designed to assist workers who have coverage through what type of plan?

1. Individual health plan

2. Employer-sponsored group health plan

3. Exchange-based health plan

4. Medicare plan

The correct answer is: Employer-sponsored group health plan

COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, is specifically designed to provide individuals with the ability to maintain health insurance coverage after leaving employment, losing job-related coverage, or experiencing a reduction in work hours. The legislation applies to employer-sponsored group health plans, which means that the coverage is offered through an employer to a group of employees, rather than through individual health plans or government programs like Medicare. The significance of COBRA is that it allows workers and their dependents to continue their health insurance for a limited time (generally up to 18 months), enabling them to bridge the gap until they can obtain new coverage or until other qualifying events occur. This is especially important because it helps avoid gaps in healthcare coverage, protecting employees and their families from the potential financial burden of medical expenses during transitions. In contrast, individual health plans are purchased directly by consumers and are not linked to an employer. Exchange-based health plans refer to the health insurance marketplace established by the Affordable Care Act, and Medicare plans cater specifically to eligible elderly or disabled individuals. Thus, the focus of COBRA is squarely on employer-sponsored group health plans, making that choice the most appropriate answer.