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. This health benefit must provide minimum essential coverage. 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.
How Much Will You Pay?
You may calculate the premium amount you will pay on COBRA, by adding the amount previously paid by payroll deduction to the amount the employer had subsidized. The national average for a major medical plan is $438/month, per individual. In some states, like Wyoming, the average monthly premium is over $700/month, per person.
Add On The 2% COBRA Administration Fee
Lastly, insurance third-party administrators may charge an additional 2% administration fee for managing the employer’s COBRA plan.
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We are a private insurance company that provides information on the COBRA law and alternative temporary insurance options if continuation is unavailable or too expensive.
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.
The Ten 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
- 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