If you have lost eligibility to be covered under your parent’s health insurance plan because of your age, the fact that you just graduated, or another reason, you have federal protection to continue coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (a.k.a. COBRA). These rules apply to companies with 20 or more employees. But, you should check with the human resources personnel at your parent’s employer to be sure.

One of the main reasons to use COBRA and stay under group coverage is if you have a pre-existing health condition. Any health risk factors you may have individually cannot make you ineligible for group coverage and this is consistent with COBRA coverage as well. Particularly if you have a pre-existing condition, keeping coverage will allow you to avoid any “wait period” for treatment on that condition. In addition, you will likely want to keep COBRA until such time as you can find another group coverage plan. Another reason to avoid a “gap” in your insurance coverage is that it is always possible to develop a health condition while uninsured that could keep you from qualifying for individual insurance.

COBRA laws give you the option to purchase up to 36 months of health insurance under your parents plan that used to cover you. Unfortunately, you will have to pay the full expense (plus a 2% administrative fee in some cases) because the employer no longer has to pay their portion for health insurance under COBRA. But, this option at least provides you with continued coverage until such time as you can find a less expensive alternative for health insurance.