Why Is My COBRA Health Insurance Premium So Expensive?
Why is my COBRA premium so expensive?
According to the Affordable Care Act, employers must offer a qualified health insurance plan to their full-time employees. All health plans have a monthly premium. Each employer determines its subsidy or how much it pays against the employee’s premium. The balance is paid by the employee out of their wages.
The amount you are paying while on COBRA is the entire health insurance premium. Which is the amount previously paid by payroll deduction along with the employer’s subsidy.
Lastly, insurance third-party administrators may charge an additional 2% administration fee for managing the employer’s COBRA plan.
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COBRA Eligibility
Individual Major Medical Insurance
Both the federal health insurance marketplace and private marketplaces offer traditional major medical plans. These plans are similar to an employer’s group health insurance benefit. This type of insurance provides minimum essential coverage.
What Are The Five Categories Of Minimum Essential Coverage
In accordance with the Affordable Care Act, here are the 10 categories of Minimum Essential Coverage (MEC):
- Outpatient care
- Emergency services
- Hospitalization
- Pregnancy, maternity and newborn care
- Services for mental health and substance use disorders
- Prescription drugs
- Rehabilitation services and devices
- Laboratory services
- Preventive, wellness and chronic disease services
- Pediatric services
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Common Third-Party Administrators
Your COBRA plan may be managed by a third-party administrator. Many employers work with the following:
- WageWorks / Conexis
- BenefitConnect EHR
- Discovery Benefits / WEX
- TASC
- Employee Benefits Corp (EBC)
- Lifetime Benefit Solutions
- Navia Benefit Solutions
If you are unsure who your plan administrator is, reach out to the human resources department of the company that provided the health insurance you had.
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Temporary health insurance is a popular, affordable solution to cover gaps in coverage while you are between Major Medical plans.
*Eligibility for short term medical insurance is based on age and state availability.
