What’s The Cost Of COBRA Insurance?

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. 

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.

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.