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  2. Getting Started With COBRA
  3. Cost Of COBRA Health Insurance

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 for temporary plans that can save you up to 70% off employer COBRA.

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 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. 

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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.

calculating cobra insurance costs
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.

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 2022

Health insurance plans through an employer are ACA Certified. They cover pre-existing conditions and have prescription medication benefits. COBRA is a continuation of that same work health insurance.

According to the Kaiser foundation, the average cost of individual health insurance in the United States is $438/month in 2022. Not all states are close to equal. In Colorado, the monthly average premium is $358, for example. Whereas in West Virginia, individuals may pay over $750 per month for health care coverage.

Source: How Much Does Health Insurance Cost Per Month?

Average Cost Of COBRA Health Insurance By State

Location 2022
United States $438
Alabama $597
Alaska $712
Arizona $390
Arkansas $387
California $417
Colorado $358
Connecticut $581
Delaware $548
District of Columbia $387
Florida $456
Georgia $394
Hawaii $484
Idaho $461
Illinois $18
Indiana $398
Iowa $502
Kansas $450
Kentucky $387
Louisiana $541
Maine $427
Maryland $328
Massachusetts $389
Michigan $340
Minnesota $327
Mississippi $448
Missouri $442
Montana $483
Nebraska $595
Nevada $383
New Hampshire $309
New Jersey $424
New Mexico $389
New York $592
North Carolina $504
North Dakota $497
Ohio $375
Oklahoma $498
Oregon $444
Pennsylvania $390
Rhode Island $361
South Carolina $444
South Dakota $601
Tennessee $445
Texas $424
Utah $456
Vermont $749
Virginia $450
Washington $396
West Virginia $752
Wisconsin $429
Wyoming $762

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