• 18
  Sep
  2009

• What is COBRA and how does it influence health insurance?

  
  Filed Under: Health Insurance

COBRA stands for Consolidated Omnibus Budget Reconciliation Act, a landmark law that the American Congress passed in 1986. The law affects all employees working for a registered private company employing more than 20 people.

Employer-provided group health insurance policies have a considerably low premium in comparison to individual health care policies. The employer also, generally, pays a part of employees' health insurance premium. The coverage available to the employee and his/her dependents gets severely affected should the employee lose his job.

COBRA makes sure that the same premium rates are available to the ex-employee for a maximum period of 18 months, or before he/she gets a new job that provides health insurance coverage. The premium, in entirety, has to be borne by the individual. COBRA only guarantees the same premium amount from the health insurance provider.

How does it influence students? Well, if you are a dependent child of a parent who has unfortunately lost his/her job, your continued coverage is determined by COBRA. If at any point during your student status you lose dependent status, the coverage ceases. The best thing during such a time is to buy an individual health insurance policy for yourself. A specially crafted policy for students can go a long way in keeping you covered at very competitive premiums.

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