How do deductibles work with COBRA?

Asked by: Theo Fahey  |  Last update: October 2, 2025
Score: 4.8/5 (21 votes)

It is not a separate policy—it's a continuation of access as if you remained actively eligible. Because your coverage is “continued,” your deductible won't reset until the new plan year, etc. The difference is your cost for coverage because the employer no longer contributes toward meeting your premium obligation.

What are the disadvantages of COBRA coverage?

COBRA cons
  • 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.

What is the COBRA 60 day loophole?

Generous Time to Enroll

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.

Does deductible reset with new job?

Does my deductible start over if I change jobs? Unfortunately, you can't transfer the deductible amount you have paid into your new health insurance plan. Your deductible will start over when you change jobs and enroll into your new company's insurance plan.

What are the rules for COBRA coverage?

COBRA eligibility has three basic requirements that must be met for you to get a continuation of coverage:
  • Your group health plan must be covered by COBRA.
  • A qualifying event must occur.
  • You must be a qualified beneficiary for that event.

COBRA Insurance | What You Need to Know

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Is COBRA coverage worth it?

“If you're close to meeting your deductible on your current insurance plan and you have high health care costs, it may be worth it to temporarily stay on your COBRA plan,” explains Donovan. The same holds true if you're far into your employer plan's year and have already met your deductible.

How do I calculate COBRA costs?

Using the information provided in Box 12 of your most recent W-2 form, labeled Code DD, you will find the total annual cost of your employer-sponsored health coverage. To determine your monthly COBRA premium, divide this annual amount by 12 and include any applicable administrative fees, which may be up to 2%.

What happens to my deductible with COBRA?

Your Insurance Deductible Will Rollover When COBRA Insurance Is Elected.

Will my insurance get my deductible back?

Getting Your Deductible Back

Your insurance company will pursue the at-fault driver's insurance company to recover the money paid for the damages, including your deductible. The time it takes to get your deductible back can vary depending on the specific circumstances of your case.

Does a deductible have to be paid upfront?

In other situations, including a pre-scheduled surgery, the hospital or other providers can ask for at least some payment upfront. But in most cases, a health plan's network contract with the hospital or other medical provider will allow them to request upfront payment of deductibles, but not to require it.

How much does COBRA typically cost per month?

COBRA coverage is not cheap.

A COBRA premium can cost on average $400 to $700 a month per person.

What is the 18 month rule for COBRA?

When Federal COBRA ends, eligible employees can buy 18 months additional health coverage under Cal-COBRA. All qualified beneficiaries are generally eligible for continuation coverage for 36 months after the date the qualified beneficiary's benefits would otherwise have terminated.

Does insurance end the day you quit?

When you leave or are let go from a job, your health insurance either expires on your last day of work or at the end of the month of your exit, says Andy Gillin, attorney and managing partner at GJEL Accident Attorneys. For example, if you quit on July 15th, your coverage usually continues until July 31st.

Is COBRA cheaper than Obamacare?

COBRA costs an average of $599 per month. An Obamacare plan of similar quality costs $462 per month—but with the government subsidies available, the average cost of an Obamacare plan on HealthSherpa is less than $10 per month. But ultimately, it depends on your situation.

What is the largest disadvantage of COBRA?

Limited coverage duration:

One of the significant drawbacks of COBRA is its limited coverage duration. Typically, COBRA allows individuals to retain their employer-provided health insurance for up to 18 months after leaving their job or experiencing a qualifying event.

Does COBRA affect your taxes?

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.

Is it better to have a $500 deductible or $1000?

Remember that filing small claims may affect how much you have to pay for insurance later. Switching from a $500 deductible to a $1,000 deductible can save as much as 20 percent on the cost of your insurance premium payments.

How to avoid paying deductible?

How Can I Avoid Paying a Car Insurance Deductible?
  1. Choose not to file a claim until you have the money.
  2. Check your policy, as you may not have to pay up front.
  3. Work out a deal with your mechanic.
  4. Get a loan.

How do deductibles work?

The amount you pay for covered health care services before your insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself. A fixed amount ($20, for example) you pay for a covered health care service after you've paid your deductible.

Does COBRA go into effect immediately?

For example, if employment ends on April 25, COBRA will pick up where the group health plan ends. If it ends immediately, COBRA eligibility begins on April 26. If the benefits stop at the end of the month, as with many employers, COBRA coverage begins May 1.

How do I get reimbursed by COBRA?

How do I file a COBRA claim for reimbursement of benefits? Your COBRA paperwork must explain how to obtain benefits and must include written procedures for processing claims. Claims procedures must be described in the Summary Plan Description.

Who pays for COBRA after termination?

COBRA and Cal-COBRA

COBRA allows former employees, retirees, and their dependents to temporarily keep their health coverage. If you get COBRA, you must pay for the entire premium, including any portion that your employer may have paid in the past.

What is the average COBRA payment?

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

How can I reduce my COBRA cost?

To reduce your COBRA insurance cost per month, one option is to see whether your employer offers other lower-cost plan options with a lower coverage level. This tradeoff could make sense if you're healthy. You can't switch plans immediately after losing your job.

Is it cheaper to get health insurance through employer or marketplace?

A Health Insurance Marketplace plan is more affordable than the health coverage offered by your employer.