What is the purpose of the Consolidated Omnibus Budget Reconciliation Act (COBRA)?

The correct choice highlights the core purpose of the Consolidated Omnibus Budget Reconciliation Act (COBRA), which is to allow employees to continue their group health benefits under certain circumstances. This federal law was enacted in 1985 and enables individuals and their families who lose their health benefits because of specific events, such as job loss, reduction in hours, or other qualifying events, to maintain their group health insurance coverage for a limited period.

COBRA is essential because it ensures that individuals do not experience a gap in their healthcare coverage during critical times of transition, allowing them to continue accessing necessary medical care. The law mandates that employers with 20 or more employees must offer this continuation coverage for a specified duration, giving former employees a vital safety net while they seek new employment or transition to another health plan.

The other options, while related to healthcare in some manner, do not accurately capture the primary function of COBRA. The act is not designed to provide tax relief or to standardize insurance policies across states, nor is it focused on the regulation of the pharmaceutical industry. Understanding COBRA's role in safeguarding health benefits is crucial for managing employee benefits and ensuring that individuals maintain access to necessary healthcare services during life changes.