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What’s The Cost Of COBRA Insurance?

I’m interested in keeping my work health plan after I resign next month. How much does COBRA insurance cost?

The average monthly cost of COBRA Insurance premiums ranges from $400 to $700 per individual.

No Pre-Existing Conditions?

If you do not have pre-existing conditions, visit the health enrollment center to learn about private marketplace plans that are more affordable than COBRA continuation.

The Actual Cost Of COBRA Insurance

The actual cost of COBRA insurance is often misunderstood. When an employee is working, the employer typically pays a portion of the health insurance premium, and the employee pays the remaining amount through their contribution. When COBRA insurance starts, the individual must pay the full amount of the insurance premium, including both the part previously covered by the employer and their own prior contribution. This can result in COBRA insurance appearing more expensive, but in reality, the actual cost of coverage hasn’t changed.

It’s simply that the responsibility for paying the entire premium has shifted from being shared between the employer and employee to being solely the responsibility of the individual.

Therefore, the actual cost of COBRA insurance is the total amount that was previously paid by the company and the employee, without any subsidy from the employer. 

COBRA insurance costs include:

  • The entire monthly premium of the employer plan that you are continuing
  • An additional 2% in administration fees

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Calculate Your COBRA Cost

To estimate your monthly COBRA costs, start by identifying the amount that was deducted from your paycheck for health insurance. Next, add this to the amount that your employer contributed. Together, these figures will give you an estimate of the total monthly cost for continuing your coverage under COBRA.

For a more precise calculation, you can also use the COBRA Premium Calculator.

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W-2

Use Last Year’s W-2 to Determine COBRA Costs

In the W-2 form of the person who paid for the health insurance, Box 12, Code DD shows the total annual cost of employer-sponsored coverage. Divide this by 12 to gauge the monthly COBRA premium.

Remember, this method assumes the cost structure remained the same and the employer-sponsored health insurance cost didn’t change. For an exact quote, consult the COBRA plan administrator or your enrollment documents.

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COBRA Administration Fee

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), employers are allowed to charge an administrative fee up to 2% in addition to the full cost of the health insurance premium. This fee is designed to cover the administrative expenses associated with managing the continuation of healthcare coverage for former employees or eligible dependents. Authorized by federal law, the 2% administrative fee is typically included in the monthly COBRA premium amount. This standardized fee offsets the costs of maintaining the COBRA program and applies to all qualifying plans.

Your Administrator

A COBRA administrator is responsible for managing the continuation of healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA), handling tasks like sending notices, managing enrollment, and collecting premiums. Their primary function is to ensure compliance with federal guidelines for both employers and eligible former employees or dependents.

Find Your COBRA Administrator.

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What is COBRA Continuation?

COBRA Insurance is actually the name of a federal law and not a company. All employers with 20 or more full-time workers are required to offer COBRA, which is the same work health insurance you’ve had.

Continuing on an employer’s major medical health plan with your COBRA rights is expensive. You are now responsible for the entire insurance premium, whereas the employer had subsidized a portion of that as a work benefit.

Often times there is a 2% administration fee that may be legally added on.

As COBRA is the same work health insurance you had, the plan continues to be managed by the employer.

What Are The Benefits?

Because this health insurance is a continuation of the coverage you had through an employer, the COBRA benefits will be the same as you had before.

Licensed Insurance Agents

Do you have more COBRA questions? Try contacting a healthcare.gov-certified insurance specialist. These COBRA customer service agents are licensed in all 50 states. They can offer advice and cost alternative plans that best suit your needs.

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Average Cost Of COBRA Insurance In 2024

Health insurance plans through an employer are ACA Certified. They cover pre-existing conditions and have prescription medication benefits. COBRA is a continuation of your most recent employer group health plan.

According to Value Penguin, the average cost of individual health insurance in the United States is $584/month in 2024. Not all states are close to equal. In Alaska, the monthly average premium is $948, for example. Whereas in Arkansas, individuals may pay over $460 per month for health care coverage.

Source: Average Cost of Health Insurance (2024)

Average Monthly COBRA Premium Cost By State

Last updated: March 7, 2024

State 2024 Cost
National $584
Alabama $584
Alaska $948
Arizona $517
Arkansas $461
California $600
Colorado $535
Connecticut $665
Delaware $567
Florida $613
Georgia $509
Hawaii $490
Idaho $473
Illinois $633
Indiana $436
Iowa $548
Kansas $602
Kentucky $497
Louisiana $666
Maine $582
Maryland $384
Massachusetts $639
Michigan $497
Minnesota $423
Mississippi $511
Missouri $594
Montana $568
Nebraska $691
Nevada $566
New Hampshire $373
New Jersey $550
New Mexico $577
New York $873
North Carolina $638
North Dakota $548
Ohio $535
Oklahoma $596
Oregon $578
Pennsylvania $576
Rhode Island $455
South Carolina $541
South Dakota $715
Tennessee $558
Texas $584
Utah $599
Vermont $908
Virginia $409
Washington $503
West Virginia $877
Wisconsin $583
Wyoming $838

COBRA Rules In Your State

For detailed information on mini-COBRA laws, which can vary significantly by state, ensuring you have the most accurate and up-to-date guidance is essential. These state-specific regulations are crucial for understanding your rights and options regarding continued health insurance coverage.

Learn more about the mini-COBRA laws in your state and how they may affect you.

COBRA Alternative
Save Up To 70%

Term Health Insurance
Covers An Insurance Gap
Until Your Next Work Health Plan Starts

Shop Plans
Get A Quote & Enroll Online
Or, Call Us
877-262-7241

people with accident medical insurance riding their bikes*Based on age and state availability

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