The Consolidated Omnibus Budget Reconciliation Act, or COBRA, requires that an employer provide the option to continue coverage under any company subscribed healthplans to any former employees, having them pay the applicable monthly payments.

As a result of termination, former employees are no longer eligible to participate in the company's group health insurance coverage. When employed, the individual had received as an amenity to employment there the opportunity to participate in the group health care coverage. If the employee were to go at it alone, the chance of applying for singular coverage is slim and the monthly fees for dental and health care coverage would be enormous. However, by participating with a largish entity such as a corporation, the individual gets a discounted rate, since there are so many healthplans coming out of that one group. COBRA allows for the continuation of that established health plan, but without the discounted rate.