Cobra how much does it cost

COBRA can help you keep your current insurance for a period of time of 18 to 36 months, but it is costly. This is because the employer is the one who is responsible for the lion's share of the monthly premiums when you have job-based insurance. If you are leaving your job, your human resources HR officer can tell you how much your COBRA premiums will be if you decide to continue coverage.

If you want to figure this out on your own without alerting your employer, ask HR how much your employer is contributing toward your monthly coverage. You can then look at your pay stub to see how much you are contributing. It gets a bit more complicated if you need to switch from a family plan to a single plan. In instances like these, the HR officer will look up the rate for single coverage on the same health plan you are currently enrolled in.

If you decide to continue your current health insurance with COBRA, there is another expense you may not be aware of: higher taxes. While you're employed, your insurance premium is deducted from your paycheck before taxes along with other pretax deductions such as your k retirement plan and group term life insurance.

These deductions make your net income look smaller and, by doing so, lower your income tax. This means that you lose the tax-free benefit you enjoyed while being employed. But not everybody is eligible for this deduction. Speak with an accountant or tax advisor. When you switch to COBRA, your income tax burden goes up because your job-based health insurance premiums are no longer deducted from your paycheck before taxes. The individual health insurance market has always been an alternative to COBRA, but one that historically excluded people with pre-existing conditions.

Today, you can access the health marketplace regardless of your medical history and at any time you have a so-called qualifying life event , or QLE. There are several QLEs that allow you to buy insurance in the marketplace:. If you experience a QLE, you are allowed special enrollment in the marketplace and can purchase a plan that fits your budget and needs.

Low- to middle-income enrollees often qualify for premium subsidies that can reduce their monthly premium cost to zero. A new federal law allows for special enrollment in the marketplace starting in due to the loss of an employer subsidy for COBRA.

In the past, when an employer provided a subsidy to cover some of the cost of the first few months of COBRA, the end of that subsidy was not considered a qualifying event. Today it is. In addition to individual marketplace plans, you can look for off-exchange plans that may be less costly than COBRA. It is important to note, however, that premium subsidies only apply to marketplace plans, not off-exchange plans. If you are leaving a job, your employer will send you a notification advising you that you're eligible for COBRA and how much it will cost.

If you say "No thanks! No exceptions! Medical bills are the number one cause of bankruptcies in the U. Again, continuation coverage under COBRA is designed to be a temporary extension of the health insurance you had at your old job—the key word here is temporary.

Under special circumstances, you might be able to extend COBRA coverage to 29 or 36 months for you and your dependents. The due date for your first payment is defined as 45 days after you elect coverage. However, if you make your payment within the day grace period, your COBRA coverage can be reinstated. Everyone is different. For example, if you have any prescriptions, you should check whether or not they will be covered under COBRA or a marketplace insurance plan.

Take a look at the overall coverage and provider network as well. Things can get confusing really quickly while you try to figure out all the health insurance plans out there. In that case, you need to do some soul-searching and ask yourself how much you really like your doctor! If you choose a plan from the marketplace, you can check with an independent agent who can help you shop around for different health plans to see if you qualify for a premium tax credit.

If you qualify for the tax credit, it can help lower your monthly payments. Your job will also inform your spouse about the health coverage if you die. You should notify your employer within 60 days if you or a dependent become eligible for COBRA coverage because of a divorce. Coverage is retroactive for when you become eligible, which is usually your last day of work. For instance, if you start a new job or get new health insurance coverage.

However, there are times when you can lose coverage. COBRA insurance makes sense in some situations. One important thing to remember about COBRA coverage -- employers usually pay for well more than half of an employer's health insurance. It's true that group health plans can cost a lot of money for employees, but employers still pick up more than half of the costs. COBRA health insurance puts all of the costs on the former employee. You no longer get any help from your previous job.

So, once you see the full cost of the health plan, you can times that amount by. Her new job came with a probationary period for new employees. She wouldn't be eligible to join their plan for 60 days. On top of that, my wife has a chronic illness, one that requires some expensive, recurring medical treatments. In other words, going without coverage wasn't an option.

We needed insurance for those 60 days. COBRA is the federal law that entitles you to stay on your employer's health insurance plan for up to 36 months after you leave your job.

Within 45 days of your last day at work, you'll get a letter in the mail from your previous company. It will outline what you're supposed to do — including who administers the company's COBRA plan, where you should send your paperwork, and, most importantly, the cost. While COBRA lets you stay on your employer's plan, your employer doesn't have to help pay for it anymore. You're on the hook for the entire monthly premium.

A truly eye-watering total. While you're in your job, your employer is probably taking care of the lion's share of those costs. In the days leading up to our New York move, scarcely a week would go by without us dropping a couple grand on something. And we considered that a bargain. No broker's fee or last months' rent requirements! It was like someone ripped the stopper out of our savings, and it was all spinning down the drain. At this point, we knew that we'd need to pay for COBRA coverage, but the letter from my wife's employer hadn't come yet.

We were guessing at — and budgeting for — the cost of the monthly premiums. Almost double the maximum we were budgeting for. That letter spurred a stint of frantic phone calls and calendar calculus. We wanted to pay as few of those monthly payments as possible. Since my wife's probationary period was 60 days, we were hoping we could get away with just two months of coverage. We spent hours on the phone.

Calling my wife's new HR office to figure out the exact date her insurance would begin. Calling her doctor's office to do anything they could to shift her chronic illness treatment to earlier in the calendar year.

No dice. We couldn't move things around enough. We didn't dare go without healthcare coverage while my wife needed treatment, nor did we want to risk gambling on pre-approval from a new plan on the marketplace. What if it didn't come on time? That would mean my wife would go without treatment.

Not an option. We were stuck. For you, that might not be the case. Between jobs, you might be willing to ditch COBRA's high price tag for a more affordable plan on the marketplace. Or, if you really love to live dangerously, you might opt to go without healthcare coverage at all. Not something I'd recommend, personally. Especially as we wanted to get out and explore our new town. But looking back, it was a small price to pay for peace of mind, knowing that my wife would be in a great new job in a great new city — and healthy while she was doing it all.

For you. World globe An icon of the world globe, indicating different international options. Get the Insider App.