How do I calculate how much COBRA I will cost?
Asked by: Anne Yundt IV | Last update: December 27, 2025Score: 4.6/5 (40 votes)
- Your contribution: $125 per paycheck X 2 = $250 per month.
- Your employer's contribution: $400 per month.
- Total contribution: $250 + $400 = $650 per month.
- Service charge: $650 x 2% (or 0.02) = $13 per month.
- COBRA premium: $650 + $13 = $663 per month.
How to figure out COBRA cost?
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.
What is the formula for COBRA?
COBRA premium calculations use the formula: COBRA amount × pay frequency ÷ 12 + administrative fee. The premium amount that appears on the COBRA Coverage Revisions form and the elected total amount that appears on the COBRA Coverage Selection form are both monthly premium amounts.
What is the 60 days COBRA loophole?
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.
How is COBRA coverage determined?
Q5: Who is entitled to continuation coverage under COBRA? In order to be entitled to elect COBRA continuation coverage, your group health plan must be covered by COBRA; a qualifying event must occur; and you must be a qualified beneficiary for that event.
How to Calculate COBRA Insurance
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 does COBRA work when you quit your job?
Federal COBRA is a federal law that lets you keep your group health plan when your job ends or your hours are cut. Federal COBRA requires continuation coverage be offered to covered employees, their spouses, former spouses, and dependent children.
What is the 105 day COBRA loophole?
So, if you maxed out the 60 day election period plus the 45 day payment period, you could actually go 105 days without paying for the coverage.
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.
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.
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.
How do I find out how much my employer pays for health insurance?
For the last few years it has been included on the W-2: It goes in Box-12 Code DD. Employers that are subject to this requirement should report the value of the health care coverage in Box 12 of the Form W-2PDF, with Code DD to identify the amount.
How are COBRA premiums paid?
The three ways to pay COBRA premiums are through ACH (linked to your bank account), credit/debit card or check. We recommend paying by ACH.
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.
How to calculate COBRA rates for hra?
A good rule of thumb is to set the utilization at 75% if your unfunded HRA plan is in its first year. Next, multiply the utilization percentage by the total HRA funds available to each individual employee. This is the COBRA premium amount if the employee would like to maintain access to their unfunded HRA.
How much does COBRA cost?
The cost of your COBRA coverage is equal to the total cost of the premium under your group health plan. That means it includes the premium you already were paying as an employee—plus what your employer was paying on your behalf. In addition, your plan may charge you a 2% administration fee.
Can you stay on COBRA after getting a new job?
Yes, you can keep COBRA coverage even when your new employer offers health insurance. The decision to retain COBRA or opt for the new employer's plan depends on your personal circumstances, such as comparing benefits and costs. There's no federal mandate to cancel COBRA upon obtaining new job-based insurance.
Is quitting a job considered a life-changing event?
Is losing or getting a new job a qualifying life event? Yes, if you lose your employer-sponsored health care, you're eligible for a Special Enrollment Period. There's no distinction between leaving your place of employment willingly, like in the case of resignation, or unwillingly, like with a layoff or firing.
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 14 day rule for COBRA?
14-Day Notice Period
The HR office must provide the COBRA Election Notice and Election Form to qualified beneficiaries within 14 days from the date of the qualifying event or loss of coverage, or when the HR office is notified, whichever comes first.
Can employers deny COBRA?
If the former employee is considered an eligible plan participant, then he or she would be a qualified beneficiary and entitled to COBRA coverage unless the second exception (denial based on gross misconduct) is applied. Under COBRA, a person who has been terminated for gross misconduct may be denied COBRA.
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.
Is insurance good for 30 days after quitting a job?
If you have an employment-based insurance plan, coverage typically ends on your last day of work or the last day of the month in which you leave your job. You may be able to continue receiving coverage through your employer's health plan with COBRA for 18 months or longer, but this option is often costly.
What is the best health insurance for unemployed people?
The best health insurance for unemployed individuals depends on your specific needs and financial situation. Medicaid offers health coverage for those with little to no income. For others, the Health Insurance Marketplace may provide affordable plans, especially for those eligible for financial help to lower costs.