There are plenty of people in the country today that are staying with their current employer just for the health insurance benefits that are provided. Most of the country understands how expensive is can be to purchase health insurance on your own. The federal government has tried to make it easier for employees to change employment or leave an existing job without losing health insurance coverage.



The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 was designed to provide continuing health insurance coverage to employees that leave a job. It only applies to companies with 20 or more employees (although part-time employees are counted as a fraction equivalent to the number of hours that they work).

Under this act, employees that leave a job (either to start their own business or to find a new employer) have the option of continuing coverage under the group plan. The only hitch is that the insured party will be responsible for the full premium cost (plus a 2% administrative fee).

The coverage under COBRA is the same as it was under the employer - as long as your former employer is still in business. It is available to employees that have an involuntary loss of employment, choose to quit, or are no longer eligible because of age. Usually the COBRA option is only effective for 18 to 36 months after termination of employment.

Although COBRA was designed to help individuals maintain insurance coverage, it is not exactly practical. Most people who are transitioning between jobs are unlikely to be able to afford the full premium cost of health insurance ? even under a group price.

Before choosing to leave an employer, you should think about the COBRA option for health insurance and try to budget so that it is a possibility.