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How much does COBRA coverage cost?
Home » Insurance » COBRA Insurance » How much does COBRA coverage cost?Group health coverage for COBRA participants is almost always more expensive than the portion that was coming out of their paycheck while at the employer because the employer pays for a portion of their employees premiums. It can still be less expensive than an individual health plan.
As mentioned before, when you were an active employee, your employer may have paid all or part of your group health premiums. Under COBRA, as a former employee no longer receiving benefits, you will usually pay the entire premium amount, that is, the portion of the premium that you paid as an active employee with the amount of the contribution made by your employer added in top. In addition, there may be a 2 percent administrative fee.
While COBRA rates may seem high, you will be paying group premium rates, which are usually lower than individual rates that offer the same types and levels of coverage.
Since it is likely that there will be a lapse of a month or more between the date of layoff and the time you make the COBRA election decision, you may have to pay health premiums retroactively-from the time of separation from the company. The first premium, for instance, will cover the entire time since your last day of employment with your former employer.
You should also be aware that it is your responsibility to pay for COBRA coverage even if you do not receive a monthly statement.
Although they are not required to do so, some employers may subsidize COBRA coverage.
Sources:
http://www.cobrainsurance.com
http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.html
Related COBRA Insurance Articles
- What is COBRA?
- When should I take COBRA?
- Who is entitled to benefits under COBRA?
- How do I file a COBRA claim for benefits?
- How long does COBRA coverage last?
- How much does COBRA coverage cost?