COBRA legislation was passed in 1986, but many workers still don't understand the benefits of this crucial legislation and how it works to protect an individual or family's health insurance coverage. The most important aspect of COBRA is that it provides a way to keep group health insurance coverage active for an individual after various types of job loss, including layoffs and firings. An unemployed person can keep his or her health insurance coverage at lower-than-average health insurance rates. This type of assistance is invaluable in keeping health insurance coverage from lapsing or becoming financially unattainable. Many families have stayed insured during difficult times thanks to COBRA.

Unfortunately, some families are unaware of their rights under COBRA legislation and react to job loss by cutting their health insurance coverage amounts. While this can provide lower health insurance rates, lowering coverage amounts is dangerous. A health insurance claim during the coverage lapse could have severe financial consequences. On top of this, most health insurance companies have waiting periods after new coverage is added to a policy, so coverage won't be restored immediately when the policy owner finds a new job. The advantage of continued coverage under COBRA legislation is that it helps to avoid a drop in any type of coverage while keeping health insurance rates down to an affordable level. Overall, this means better protection for the policy holder and a much more responsible approach to temporary financial issues. Families can stay covered at a reduced cost, which makes it easier to find a new job with group coverage before COBRA assistance runs out (the maximum coverage assistance limit is 36 months).

COBRA legislation is beneficial to all workers with group health insurance plans, not just workers who involuntarily lose their jobs. Voluntary job loss is covered under the legislation, so workers can use COBRA to their advantage after quitting a job. Group health plans with 20 or more members usually qualify under COBRA legislation, although there are several important aspects of the act that can come into play; beneficiaries, for instance, must be dependents or spouses covered under the original health plan for one day prior to when the employee leaves the company providing the health care plan. It's also important to note that COBRA is not free; former employees must pay their premiums, which are still significantly reduced, plus some administration fees.

COBRA is one of the most significant pieces of health care legislation ever introduced. It has had a strong effect in keeping insurance coverage active. Families have benefited significantly, as COBRA provides much-needed simple assistance for keeping health care bills under control.