The brave individuals who become self-employed often preserve their health coverage by taking the initial step of extending their employer-sponsored health benefits through COBRA. The Consolidated Omnibus Budget Reconciliation Act of 1985 allows workers to extend those benefits for up to 18 months after leaving a job.

The down side is employers no longer pay their portion of the plan’s premium, which can be anywhere from 75 to 80 percent of a plan’s cost. By keeping the coverage and paying the employer portion, you’ll likely see a huge difference in what you pay for the coverage.

As long as you continue to pay for COBRA coverage, however, you cannot be denied coverage for your pre-existing condition. However, if your 18-month COBRA period ends or you decide to leave COBRA to seek individual coverage through the private market, you do risk the possibility that you may be denied an insurance policy.

Not surprisingly, this threat is often a deterrent to those choosing to either be self-employed or opting to keep an unfulfilling job which might be providing them with health benefits.