There are instances when insurance is part and parcel of employment at a certain company.  This means that the insurance coverage for individual employees is provided under a group policy.  Cancellation of insurance may result upon resignation or termination of employment at the company offering the group insurance feature.  However, it is provided by the federal laws and Consolidated Omnibus Budget Reconciliation Act (COBRA) that an individual who wishes to continue his or her insurance policy under the group insurance plan may do so, as long as he or she makes timely insurance premium payments.

Under COBRA, it is stated that employees and their dependents under a group insurance plan may continue with the insurance payments and thus continue to receive benefits under such coverage for 18 months.  This applies unless the result of termination is the employees’ gross misconduct.

Under the same federal law, the dependents of employees covered by group policy may still avail of the insurance (especially health coverage) for up to 36 months even after the group insurance plan policyholder’s demise.  Moreover, this clause still applies even if the principal policyholder has divorced his or her spouse, the children have grown beyond the age of dependence, or the employee has become eligible for Medicare.  However, COBRA doesn’t apply in church-sponsored or provided group insurance plans, protection schemes provided for a very small group (say only 20 employees or less), and group insurance plans for federal employees.