Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
In short, COBRA is an extension of the current group health insurance plan offered to employees after they have left the company. This coverage can be kept for up to 18 months and is only available to individuals and families covered under a plan with more than 20 employees enrolled.
Premiums for COBRA coverage are 102% of the total cost of insurance – this is important because many employers pay for part of the cost while the employee is still working. If you were only paying half of the premium before and your employer paid the other half, you would now be paying the entire thing yourself plus 2%.
Please note, COBRA election applies to each person individually that is covered under a given policy. If five family members are covered under a COBRA policy, they can all accept the coverage or accept it on an individual basis (for example, one or two family members accepting and three or four rejecting). This is important because individual market health insurance can often be much less expensive than a COBRA policy, which can average $1,200-1,500 for a family and upwards of $2,500 per month for “Cadillac” plans at some companies. If you are in good health and offered COBRA coverage, don't wait until it expires to look for a new policy.
Please let me know if I can be of further assistance. Thanks very much.
That is a great question! The unfortunate answer is that it is much more expensive than what you are paying now. The rule is that you pay the full price for your coverage, your part plus what your employer had paid, and then another 2% on top of that. If you were on a family plan, each person looking to extend on the plan will also pay their own 102%. It gets pretty steep pretty fast. I hope that you are just asking, and don't have to find out for yourself. Thanks for asking!
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Premiums for COBRA coverage are 102% of the total cost of insurance – this is important because many employers pay for part of the cost while the employee is still working. If you were only paying half of the premium before and your employer paid the other half, you would now be paying the entire thing yourself plus 2%.
Please note, COBRA election applies to each person individually that is covered under a given policy. If five family members are covered under a COBRA policy, they can all accept the coverage or accept it on an individual basis (for example, one or two family members accepting and three or four rejecting). This is important because individual market health insurance can often be much less expensive than a COBRA policy, which can average $1,200-1,500 for a family and upwards of $2,500 per month for “Cadillac” plans at some companies. If you are in good health and offered COBRA coverage, don't wait until it expires to look for a new policy.
Please let me know if I can be of further assistance. Thanks very much.