How Much Does COBRA Insurance Cost?

Find out how much it will cost to use COBRA insurance

COBRA Eligibility

Many people have read and heard news coverage about how expensive health insurance and COBRA insurance can be, but many people have never had to actually sit down and figure out how much COBRA insurance will cost for them. Given how much people are used to paying for health insurance with their employers, the shock of the COBRA insurance price tag is almost always surprising. Most companies pay anywhere between 50%-90% of the cost of health insurance and under the COBRA insurance law, that entire cost is passed onto the consumer.

How Much Does COBRA Insurance Cost?

Under the COBRA insurance law, COBRA coverage costs 102% of the entire cost of health insurance under the employer sponsored plan. So what does that mean? That means that the employee must pay the full premium cost plus a 2% administration fee. To determine how much that COBRA cost is, you must add together the cost you paid for health insurance with your employer’s contribution. This information can be found on your paystub or simply by asking your employer or Human Assets department. You can also find this amount on your COBRA insurance election form.

Once you find out how much that amount is the next step is to add the 2% administration fee. You can determine this amount by simply multiplying your total premium cost by .02 and adding that amount. That is the total cost of COBRA insurance for you and your family.

Why Does COBRA Insurance Cost So Much

The next question most people have after they calculate how much COBRA insurance costs, is why is it so expensive? The reason that COBRA insurance is so expensive is that you are continuing the plan you had with your employer. Under current health insurance laws, no one can be excluded from employer sponsored health insurance. That means that the employer’s plan covers everyone that you work with and their families, healthy or otherwise. Since in most workplaces, there are both healthy and unhealthy people as well as high risk and low risk individuals, the group health insurance plan is more expensive because it must cover all of those people. If you and your family are relatively healthy, in many cases if you get a private health insurance quote, it will be much cheaper than COBRA insurance.

What are Alternatives to COBRA Insurance That Are Less Expensive?

There are many health insurance options out there that are much less expensive than COBRA insurance. The most common and most similar to COBRA insurance are private individual and family plans. These plans offer all the same benefits and coverage as an employer plan but at a lower cost if you are generally healthy. In addition, there are catastrophic insurance plans, short term health insurance plans, government sponsored health insurance plans, and state sponsored health insurance plans for people with certain health insurance needs. If you have a preexisting health condition you can also look into PCIP health insurance plans.

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