What distinguishes COBRA from HIPAA in terms of health insurance?

COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, primarily serves as a continuation of health insurance coverage for individuals and their families who experience a qualifying event that would otherwise result in the loss of health benefits. This allows individuals to maintain their group health insurance for a limited period, typically 18-36 months, depending on the circumstances that triggered the COBRA eligibility.

On the other hand, HIPAA, or the Health Insurance Portability and Accountability Act, focuses on the security and privacy of health information as well as providing certain rights related to health insurance coverage for workers and their families. Specifically, HIPAA ensures that individuals who change jobs can carry over their health insurance coverage without being denied due to pre-existing conditions as long as they meet certain criteria.

Given this context, the correct option conveys that COBRA essentially acts as a temporary safety net for health coverage during transitions, while HIPAA serves to facilitate smoother coverage transitions by addressing issues related to pre-existing conditions for individuals entering new health plans. This distinct separation of purpose is what makes the chosen answer accurate, clarifying the roles each act plays in the realm of health insurance.