Understand the costs of COBRA health insurance
It is extremely important to understand COBRA insurance rates and COBRA insurance costs while you are making a decision to enroll in COBRA health insurance. There are many different health insurance options on the market and part of any good COBRA insurance decision should always involve calculating COBRA rates and comparing those to the costs of other insurance plans. In doing this you can calculate exactly how much COBRA insurance rates are, as well as calculate alternative health insurance plan rates. This will help you make a sound decision for your future that works with both your financial needs as well as health care needs.
It is actually quite simple to calculate COBRA insurance rates. All you need is some simple information that you can usually find on your paycheck stub and you can have your COBRA costs in minutes. This information is also many times included on your COBRA election form.
Step 1: Find Your Total Health Insurance Premium Rate
The first thing you must do to find out your COBRA rate, is to understand the full cost of your health insurance premium. Since under COBRA you are responsible for paying the entire premium, including any amount your employer previously paid for, you need to full rate. This is usually 60-80% higher than what you currently pay. You can find this information on a pay stub by adding together your health insurance cost plus your employer’s health insurance contribution. Add those two numbers together to get your base COBRA insurance rate and write it down.
Step 2: Add on the COBRA Administration Charge
Under the COBRA insurance laws, you will be responsible for paying a 2% administration fee on top of the entire premium. To figure out this amount, simply multiple your full premium (from step 1) by .02. This is the COBRA administration fee.
Step 3: Calculate Your COBRA Insurance Rate
Now just simply add those two numbers together to calculate your COBRA insurance rate. This is the amount that you will need to pay each month in order to stay covered with COBRA and maintain the exact same health insurance plan.
The next important step for anyone considering COBRA is to compare their COBRA insurance rates with rates for other health insurance plans. The easiest way to do this is to get free quotes from multiple health insurance companies and plans. Using the cost and the details of each plan, you can compare costs and make a smart decision about whether COBRA insurance is the right choice for you.