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Cost of COBRA Insurance

How Much Does COBRA Insurance Cost?

COBRA Insurance Cost

Most people looking at COBRA insurance are also examining their budgets carefully since in most situations they have lost their jobs. And this makes knowing the cost of COBRA insurance and how to calculate it very important. Additionally, when calculating the cost of COBRA health coverage, you should also determine how much alternative insurance plans would cost so that you can compare prices and coverage. Most people find they can save up to 65% when they switch to a private plan as opposed to using COBRA coverage. Use the information below to calculate the cost of your COBRA coverage and to learn how to compare it to other plans.

Calculating the Cost of COBRA Insurance

Calculating the cost of COBRA insurance is actually surprisingly easy. Let's start with the basic cost and then from there we will look at how to calculate this number your self. The cost of COBRA is 102% of the monthly premium. The monthly premium consists of both what you paid for health insurance and what your employer paid for insurance. Since you are no longer employed there, they will no longer pay for any part of the insurance plan. Then in addition, there is a 2% administration charge assessed monthly.

Your monthly health insurance contribution while employed

Plus

Your former employer's monthly health insurance contribution

Plus

2% monthly COBRA admin fee

Equals

Total Cost of COBRA insurance

Depending on the information you have available, there are three ways to calculate COBRA costs.

  • Option 1: Using Your COBRA Election Form
    The easiest way to calculate the monthly premium for COBRA medical insurance is to use your COBRA election form. On this form you will be able to see the individual cost for each family member to maintain coverage. Simply add together the amount for each family member who will be enrolling in COBRA. Then multiply that amount by 1.02 to add the 2% admin fee.
  • Option 2: Using Your Pay Stub
    If you have a copy of your pay stub, you can also easily calculate the cost of COBRA health. On your pay stub you will need to locate both your monthly contribution to health insurance and your employer's monthly contribution for insurance. Add those two numbers together to get the full cost of the premium. Then multiply that number by 1.02 to add the administration fee and determine the final monthly premium cost for COBRA.
  • Option 3: Contacting Your Former Company
    If you do not have access to a pay stub or your election form, you can all your prior company or health insurance company to determine the monthly premium. Make sure to ask the cost based on which family members are signing up and ask whether or not the 2% admin charge has been added.

Determining if You Can Afford COBRA Insurance

Once you know the monthly cost of COBRA insurance, now it is time to determine if you can afford it and if it is the most cost effective plan for you. This is going to depend on your budget, your health needs, and what other options there are on the market. Although many people find they can save money by using an alternate insurance plan, this will only work if you qualify and if the plan provides the type of coverage you need. On average here are the prices for the different insurance plans you may consider.

Family Plan Individual Plan
Private Full Coverage $419 $230
Catastrophic Plan $185 $95
Short Term Plan $215 $119
High Deductible Plan $99 $49
COBRA $1085 $585

Learn more about these health insurance options or start exploring alternate plans by getting a quote below.

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