The cost of COBRA health insurance is the amount that your former employer pays to the insurance company for your health insurance plus an optional small administrative surcharge. In many cases this cost is higher than the cost of buying a health insurance policy that you can purchase on your own.
How Much Is Cobra Insurance?
Many people are surprised by their cobra insurance premiums because they paid so much less for their medical insurance when they were working. This is because the only paid part of the cost of their insurance when they were employed. Employers typically subsidize the cost of health care for their active employees, but do not do so for former employees.
How Does Cobra Insurance Work?
COBRA or the Consolidated Omnibus Budget Reconciliation Act is not an insurance company. It is a law that forces most employers that have over 20 employees to offer health insurance to their recently terminated employees.
COBRA health insurance policies allow certain former employees to stay on the group health insurance policies offered by their former employers. The employee has to pay their own insurance premiums.
You can usually keep your COBRA coverage for 18 months. In certain circumstances the length of time can be longer. You can find more details on this Federal Department of Labor website.
If you are healthy and the other family members who need coverage are healthy, you will probably be able to find a lower price by exploring cobra alternatives. (People who have high blood pressure and or high cholesterol will usually qualify if the condition or condition is under control with medications.)
Those who have more serious medical conditions may find that COBRA is the best alternative for them even though it may be expensive. They might find that they will be denied for an individual health insurance policy or that they will be charged extra for their condition if they purchase an individual or family policy directly from their employer.