COBRA

Young Family

COBRA is short for Consolidated Omnibus Budget Reconciliation Act. This is a law that requires most employers with group health plans to allow an employee to continue with the plan on a temporary basis in the event of a layoff, termination, or other change of employment status that is considered a "qualifying event." COBRA also has a provision that allows older children (usually between the ages of 18 and 23) who've outgrown their parents' plans to purchase up to three years of additional coverage. A 28-year-old single male, laid off from his job in Connecticut, can get coverage for six months for $81.52 per month and a deductible of $250. If that same 28-year-old were married with two children and wanted to cover the entire family AND maintain his $250 deductible, his monthly premium would go up to $222.32. If the deductible were increased to $500, the premiums would drop to $197.68.

Short-term Policies

Student

A short-term health insurance policy is meant for short-term situations. For example, if a graduating student feels she will find a job in a matter of a few months, a short-term policy will cover her during her job hunt. These plans are relatively inexpensive and are meant to cover predictable gaps in coverage. Even if the job seeker from our example couldn't predict how long it would take to find a job, a short-term policy would offer some coverage without breaking the bank.