COBRA Cost Calculator: Estimate Your Health Insurance Premiums

COBRA Cost Calculator: Instantly Estimate Your Monthly Health Insurance Premiums

Losing your job or experiencing another qualifying life event can be a stressful time, and navigating your health insurance options adds another layer of complexity. If you’re looking to continue your employer-sponsored health coverage through COBRA, one of the most immediate questions is: “How much will it cost?”

Our comprehensive COBRA Cost Calculator is here to provide clarity. This modern, user-friendly tool helps you instantly estimate your monthly premiums, empowering you to make informed decisions about your healthcare coverage.

How to Use Our COBRA Cost Calculator

The calculator above is designed for simplicity and accuracy. To get your personalized estimate, you only need a few pieces of information, which can often be found on your latest pay stub.

Your Contribution Per Pay Period

This is the amount that was regularly deducted from your paycheck for your health insurance plan.

Your Pay Frequency

Select how often you were paid—whether weekly, bi-weekly, semi-monthly, or monthly. This ensures the calculator accurately converts your per-pay-period deduction into a total monthly contribution.

Employer’s Contribution Per Month

This is the portion of the health insurance premium that your employer paid on your behalf. If you don’t know this amount, you can often find it on your benefits statement or by asking your HR department. A common practice is for employers to cover a significant portion of the premium, often making the full cost under COBRA a surprise to former employees.

The 2% Administrative Fee

Federal law permits plan administrators to charge an administrative fee of up to 2% of the total premium. This fee covers the cost of managing your COBRA benefits. Our calculator includes this by default, as it is a common charge.

Understanding Your Estimated COBRA Costs

Why does the cost of COBRA seem so high compared to what you paid as an employee? The answer lies in who pays the premium.

What Makes Up the Total Premium?

As an active employee, you shared the cost of your health insurance with your employer. Under COBRA, you become responsible for 100% of the premium. This includes the share you were already paying plus the full amount your employer was contributing.

Total Premium = Your Monthly Contribution + Your Employer’s Monthly Contribution

This is the primary reason for the significant price increase when you switch to COBRA coverage.

Why is There an Administrative Fee?

The small additional fee (up to 2%) is legally allowed to compensate the employer or plan administrator for the clerical costs associated with offering and managing continuation coverage. This includes tasks like processing payments, sending notices, and handling enrollments.

What is COBRA and Who is Eligible?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time.

Qualifying for COBRA Coverage

You may be eligible for COBRA if you lose your group health coverage due to specific events, known as “qualifying life events.”

For Employees, qualifying events include:

• Voluntary or involuntary termination of employment for reasons other than “gross misconduct”

• Reduction in the number of hours of employment

For Spouses and Dependent Children, qualifying events include:

• Termination of the covered employee’s employment

• Reduction in hours worked by the covered employee

• The covered employee becoming entitled to Medicare

• Divorce or legal separation from the covered employee

• Death of the covered employee

Duration of COBRA Coverage

The length of time you can maintain COBRA coverage typically depends on the type of qualifying event.

• 18 months for termination of employment or reduction in hours.

• 36 months for other qualifying events, such as death of the employee, divorce, or a dependent child losing their status.

In some cases, the 18-month period can be extended if you or a family member experience a second qualifying event or are determined to be disabled by the Social Security Administration.