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If you haven’t ever had a gap in employment or health insurance than that’s definitely a good thing but should you lose your job and your health insurance as a part of that is where COBRA insurance would kick in.

Explanation and History

You could also consider COBRA like a gap insurance policy. When people lose their jobs, are between jobs or lacking in healthcare coverage is when COBRA steps to the plate. As a little history COBRA stands for Consolidated Omnibus Budget Reconciliation Act. Though it originally had other purposes it is now used as an exclusive acronym for the health insurance provision that became part of the law in ’86. That’s how COBRA transitioned into today’s COBRA insurance.

User Base

The main user base for COBRA is people that have lost their primary health care coverage either through termination, lay-off or transition to another job or any other reason. Your COBRA insurance is more than just for the former employee as it’s also used by newly retired workers and those that have disabilities. It will in almost all instances cover the spouse and dependents that were covered under the original health plan.

Cost

Costs are almost always going to be more expensive to those that have it than the original health care coverage that they received when they were employed under the originating health care plan. The reason for this is that the majority of employers are going to cover a small to substantial percentage of their employees associated health care costs; in fact, it’s even law in some instances.

If you choose to enact your COBRA coverage you’re on your own for all of the costs. COBRA insurance; however, is offered at the groups coverage rate, yes even if you are an individual. Group rates are lower than individual rates as there are the discounts associated with a large group plan so even though you must cover all of the cots it will come at a lower rate for you than most of the individual health care policies.

When someone loses their job for whatever reason there is still that need to keep health care coverage and thought that price is going to spike it will still be a lot lower than what you’d be paying through an individual plan. Anything that would be considered pre-existing is still covered as the COBRA plan is an extension of your previous policy with the only difference being that you’re paying the full price for the coverage now.

Health Benefits

The benefits that were part of your originating health policy are extended with the COBRA, things; such as:

• Hospitalization
• Inpatient care
• Outpatient care
• Prescriptions
• Surgery

Some of the exceptions are that your extended-stay care should you need it might not be covered as well as dental and also the life insurance that was offered through your employer is not part of a COBRA insurance plan.

You are going to get a variance in provider to provider COBRA insurance plans as COBRA is not offered by one large “COBRA body;” instead it is simply a law that stipulates the coverage types that the COBRA users must receive from the plan. Depending on the provider they may just offer the minimum or could very well offer above that.