Colorado Health Insurance Expert Says There May be Better Alternatives to COBRA After Losing Employment

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An individual health insurance policy may be a better alternative than electing COBRA coverage, according to Colorado health insurance expert Michael Horvat, founder of Under COBRA, the former employee is responsible for up to 102% of the premium, whereas they likely paid only a fraction of the premium as an active employee. Care should be taken to choose the best individual policy given the former employee's unique situation.

Individual policies can be prohibitively expensive in some states; however, Colorado has very reasonable rates, making individual policies an attractive alternative to COBRA.

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Employees in Colorado who lose their jobs may want to consider an individual health insurance policy as an alternative to continuing their former employer's group policy through COBRA. "While the decision to participate in COBRA depends on multiple factors -- such as pre-existing conditions and the length of time someone will be out of work -- the cost of COBRA coverage is often surprising," according to founder Michael Horvat, who has over 28 years of experience as a Colorado health insurance broker. "Individual policies can be prohibitively expensive in some states; however, Colorado has very reasonable rates, making individual policies an attractive alternative to COBRA."

Introduction to COBRA

COBRA is often confused for a health insurance plan; however, it actually is an acronym for the Consolidated Omnibus Budget Reconciliation Act (COBRA). Congress passed this law in 1986 to provide certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. The law generally covers health plans maintained by 1) private-sector employers with 20 or more employees, 2) employee organizations, or 3) state or local governments. COBRA continuation coverage generally lasts for a maximum of 18 months.    

The cost to continue group health coverage for COBRA participants is often significantly more expensive than the cost for active employees, who typically pay only a fraction of the insurance premium. COBRA participants, on the other hand, may be required to pay up to 102% of the premium costs.

Individual Health Policies

Individual health policies are an alternative to COBRA and fall under two categories: short term and permanent. In Colorado, inexpensive short term policies are available, particularly for someone who has no pre-existing conditions. These policies typically provide 90 days of coverage but can be extended up to 185, or in some cases, 365 days. Short term policies usually have more exclusions than COBRA coverage or permanent policies. This is why it is important to work with an experienced broker to understand how the details of each type of policy will impact the applicant's unique situation.

If a separated employee anticipates being out of work for a longer period of time or wants to investigate self employment, then a permanent individual policy may be a better option. These plans usually offer more comprehensive coverage than short term plans.

Final Considerations

COBRA coverage may be a reasonable option if a separated employee or family member has a pre-existing medical condition; however, it is important to speak with an experienced health insurance broker to see how much pre-existing conditions will impact the cost of an individual health policy. A good broker may still be able to obtain significant savings for separated employees with pre-existing conditions.

About is a Colorado based health insurance broker. We provide free quotes for Individual Health Insurance which includes Major Medical, Preferred Provider Organizations (PPO), Health Maintenance Organizations (HMO), Group Health Insurance, Self Employed Health Insurance, Medicare Supplements, Long Term Care Insurance, Medical Savings Accounts, Disability Insurance, Life Insurance, and the following specialized plans: Student Health Insurance, International Health Insurance, Dental Insurance, and Short Term Health Insurance. Please visit our website at

Contact Information:
Michael Horvat
1423 W. Colorado Ave.
Colorado Springs, CO

Toll Free: (800)-345-0789
Phone: (719) 630-1515
Fax: (719) 630-1010


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Chad Traxler
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