Legal Requirements In addition to the previously mentioned reasons for rising health-care cost, requirements mandated by the Consolidated Omnibus Budget Reconciliation Art (COBRA) passed in 1986 also have increased health-care costs. Under the law, employers with 20 or more employees (except the federal government and churches) must provide extended health-care coverage to the following group, even when not employed by the company:
1. Employees who quit.
2. Employees who are terminated, but not for “gross misconduct”
3. Widowed or divorced spouses and dependent children or former or current employees.
4. Retirees and their spouses whose health-care coverage ends.