What to do when COBRA is too expensive?
Asked by: Elijah Champlin III | Last update: July 7, 2025Score: 5/5 (63 votes)
What if you can't afford COBRA?
Instead of enrolling in COBRA continuation coverage, there may be other more affordable coverage options for you and your family through the Health Insurance Marketplace, Medicaid, or other group health plan coverage (such as a spouse's plan) through what is called a “special enrollment period.” Some of these options ...
Why is COBRA so unaffordable?
In general, COBRA is expensive because you pay both your employee side of premiums AND the employer side of premiums. For example, this could be a total of like $600 for a single person that's young.
How to transition from COBRA to marketplace?
Can I drop it during Marketplace Open Enrollment and enroll in a Marketplace plan instead? During Marketplace Open Enrollment, you can sign up for a Marketplace plan even if you already have COBRA. You will have to drop your COBRA coverage effective on the date your new Marketplace plan coverage begins.
How much should I expect to pay for a COBRA?
Based on plan and state, COBRA costs range from about $400 to $700 per month and are based on the following: Your previous monthly insurance contribution. Your recent employer's monthly insurance contribution.
COBRA Insurance | What You Need to Know
Can I negotiate COBRA premiums?
Your employer may subsidize COBRA, either pursuant to a company-wide plan or an individual severance agreement that you negotiate.
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 do I do if COBRA is too expensive?
If COBRA feels expensive, consider ACA plans or short-term health insurance. Marketplace plans during the open enrollment period or a special enrollment period can offer more budget-friendly options.
What to do after COBRA insurance runs out?
When all COBRA/Cal-COBRA extensions are exhausted, you can get individual health insurance under HIPAA (see below) or you may purchase a policy on the individual market. You can compare your COBRA premium with a similar policy on the individual/family market to find out which is best for you.
What is the 60 day loophole for cobras?
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.
Is there a better option than COBRA?
Marketplace insurance, available through the Affordable Care Act, often offers more affordable premiums than COBRA. The cost difference can vary based on the chosen plan, location, and income, as subsidies may reduce premiums for marketplace plans.
How do I calculate my COBRA payment?
If you want to figure this out on your own, ask HR how much your employer is contributing toward your monthly coverage. Then, check your pay stub to see how much you're contributing. After adding these figures, add another 2% (for the service fee). This will show you exactly how much you'll expect to pay for COBRA.
What are the downsides of COBRA insurance?
Cons of COBRA Health Insurance
Some of the most notable ones include the large cost of insurance when fully paid for by the employee, the brief COBRA coverage period, and the employee relying on the employer.
How to make COBRA cheaper?
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.
What can I do instead of COBRA?
- You can enroll in a Marketplace plan within 60 days of losing your job-based coverage.
- Find Marketplace plans and prices to compare them to your COBRA coverage or offer.
- If eligible for Medicaid or CHIP, you can enroll in those programs any time and coverage can start immediately.
How do I waive COBRA coverage?
If you are currently receiving COBRA coverage for which a premium is being paid and you wish to waive future coverage, you can simply refrain from paying the COBRA premium for that coverage period.
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.
Can I go to the doctor while waiting for a COBRA?
You will be reimbursed for any medical bills that you pay out-of-pocket during this period. Contact the plan administrator for more information on filing a claim for benefits. Complete plan rules are available from the employer's benefits offices.
Why is COBRA so expensive?
Why is COBRA more expensive than employer-sponsored insurance? COBRA is more expensive because the individual is responsible for the entire premium amount without the employer's financial contribution that is provided during active employment.
What if I can't pay 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.
Can you go from COBRA to marketplace?
When employer contributions to COBRA premiums cease, you can also qualify for a special enrollment opportunity to switch to Marketplace coverage.
Can COBRA premiums be refunded?
Request a Refund for Amounts Paid in COBRA Premiums Exceeding Federal Employment Tax Liability: The employer may claim the Credit through an employment tax refund on the applicable employment tax return, generally Form 941, Employer's Quarterly Federal Tax Return.
Who pays for COBRA after termination?
(California passed a similar law known as “Cal-COBRA.”) Under COBRA, the group plan health insurance plan made available to terminated workers provides the exact same benefits as they would receive if they were still a member of the group, except that the employees have to pay the employer's cost of providing the ...
Can you cancel a COBRA at any time?
Yes, you can cancel COBRA coverage at any time. However, be aware that cancellation does not trigger a special enrollment period for new health insurance.
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.