Does COBRA do payment plans?
Asked by: Maida Schuster | Last update: December 24, 2025Score: 4.3/5 (11 votes)
Can you pay a COBRA in installments?
The plan must allow you to pay the required premiums on a monthly basis if you ask to do so, and the plan may allow you to make payments at other intervals (for example, weekly or quarterly).
Is COBRA a monthly payment?
Your monthly COBRA premiums (or payments) will equal the total cost of the premium under your employer-sponsored health insurance, plus a 2% administration charge. If you've had insurance through your employer for a while, the price to continue that coverage on your own is going to sting.
What are the payment methods for COBRA?
Check, Business Check, Cashier Check, Bill Pay, or Money Order: If you decide to pay your COBRA premiums by check (personal check, business check, cashier check, bill pay) or money order, please make your check payable to “Vita COBRA” and send the payment to Vita COBRA, PO Box 2167, Omaha, NE 68103-2167.
How long do I have to make a COBRA payment?
The initial premium payment must be made within 45 days after the date of the COBRA election by the qualified beneficiary. Payment generally must cover the period of coverage from the date of COBRA election retroactive to the date of the loss of coverage due to the qualifying event.
COBRA Insurance | What You Need to Know
What is the 60 day loophole for COBRA?
You have 60 days to enroll in COBRA once your employer-sponsored benefits end. Even if your enrollment is delayed, you will be covered by COBRA starting the day your prior coverage ended.
What happens if I don't pay for COBRA?
If your COBRA payment is not made in a timely manner, or within the 30-day grace period then you are risking termination of your COBRA rights and coverage.
Do you pay COBRA directly?
COBRA premiums may be paid to the employee, and the employee would pay the insurance company directly. Since there is no guarantee that the employee will use the funds to pay the premiums, the funds are considered wages and subject to applicable taxes.
How do employers pay for COBRA?
Who pays for COBRA coverage? The employee generally pays the full cost of the insurance premiums. In fact, the law allows the employer to charge 102 percent of the premium, and to keep the 2 percent to cover your administrative costs.
Are COBRA payments tax deductible?
Are my COBRA premiums deductible? Yes they are tax deductible as a medical expense. There isn't necessarily a “COBRA Tax Deduction”. You can only deduct the amount of COBRA medical expenses on your federal income tax in excess of 7.5% of your Adjusted Gross Income and then only if you itemize deductions.
What are the disadvantages of COBRA coverage?
- COBRA can be expensive, especially compared to the premiums you were paying before your qualifying event. ...
- COBRA does not apply to all employer-sponsored health plans—in particular, those organizations with fewer than 20 employees may have no requirements. ...
- Even if you get an extension, COBRA is only temporary.
Can I use COBRA for 2 months?
You can collect COBRA benefits for up to 18 months.
Who is not eligible for COBRA?
Why would an employee not qualify to enroll in Cal-COBRA? The employee is enrolled in or eligible for Medicare. The employee does not enroll within 60 days of receiving the notice of eligibility from the employer. The employee is covered by another health plan.
What is a typical COBRA payment?
Average Cost of COBRA Insurance in 2025
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 $537/month in 2025.
How long can you use COBRA after leaving a job?
COBRA coverage lets you pay to stay on your job-based health insurance for a limited time after your job ends (usually 18 months). You usually pay the full premium yourself, plus a small administrative fee.
Why is COBRA so expensive?
COBRA coverage is not cheap.
Why? Because you're now responsible for paying your portion of your health insurance: The cost your employer contributed to your premium, in addition to the 2% service fee on the cost of your insurance.
How to make COBRA payments?
Payment options
You can make online payments with a credit or debit card, or from your checking or savings account. It takes 2-3 business days for payments to be processed, and they appear on card and bank statements as "Health Ins Premium Pmt."
Is severance pay covered by COBRA?
When employees lose their jobs and are offered severance, it's common for employers to pay all or a portion of the COBRA premiums for a few months on a pre-tax basis (although not required by law).
Does COBRA coverage begin immediately?
Assuming one pays all required premiums, COBRA coverage starts on the date of the qualifying event, and the length of the period of COBRA coverage will depend on the type of qualifying event which caused the qualified beneficiary to lose group health plan coverage.
Is COBRA cheaper than marketplace?
Both COBRA and ACA Marketplace plans have their advantages. COBRA lets you keep your exact employer-based plan but is often more expensive. ACA plans may be more affordable, especially with subsidies, but require choosing a new plan. The best choice depends on your financial situation and healthcare needs.
What is the grace period for COBRA?
After you are established on your COBRA coverage, ongoing monthly payments are due the first day of each month. There is a grace period of 30 days from the due date for ongoing monthly premium payments. If you mail your payment, it must be postmarked within the 30-day grace period.
What if I elect COBRA but don't pay?
The plan cannot require you to pay a premium when you make the COBRA election. It must provide at least 45 days after you elect COBRA for you to make an initial premium payment. If you fail to make any payment before the end of the initial 45-day period, the plan can terminate your COBRA rights.
Do you have to pay for COBRA upfront?
Plans cannot require qualified beneficiaries to pay a premium when they make the COBRA election. Plans must provide at least 45 days after the election (that is, the date the qualified beneficiary mails the election form if using first-class mail) for making an initial premium payment.
What happens if a company refuses to offer COBRA?
DOL ERISA Penalties — An employer is liable up to an additional $110 per day per participant if they fail to provide initial COBRA notices. ERISA can also hold any fiduciary personally liable for non-compliance.
Can you have a COBRA for one month?
However, if you only need COBRA coverage for a short period of time, such as one or two months, you can pay only for those months from the coverage loss date.