COBRA Cost Calculator
Estimate the monthly and total cost of keeping group health coverage through COBRA.
What it does
COBRA is the federal rule that lets a covered person keep an employer health plan for a limited time after a qualifying event such as leaving a job, reducing hours, divorce, or the death of the covered worker. The plan stays the same. The cost usually does not. Once the employer stops contributing, the person enrolled in continuation coverage normally pays the full premium plus a small administration charge.
This calculator adds the employee share and the employer share to find the true monthly premium, then applies the plan's administration fee. It reports the monthly figure, the annual figure, and the total for however many months the person expects to stay on the plan. That makes it easier to compare COBRA with a marketplace plan, a spouse's plan, or a short-term policy.
The administration fee is capped at 2 percent for most COBRA elections. Some plans charge less, and a few charge nothing. The calculator accepts any rate from 0 to 2 percent so it can match the letter from the plan administrator. The months field accepts 1 to 36, which covers the standard 18 month period and the 36 month periods used for dependents in some situations.
The result is a budget figure, not a quote. It does not include dental or vision premiums that are elected separately, out-of-pocket costs such as copays and deductibles, or any state continuation program with different rules. Use the election notice from the plan as the final source for the exact amount and the deadline.
People often compare the COBRA premium with the full cost of a marketplace plan. The comparison should include the deductible, the network, and the drug formulary, not only the monthly bill. This page gives the COBRA side of that comparison in a few seconds.
How to use
- Find the employee premium share on the most recent pay stub or benefits statement.
- Find the employer premium share in the plan summary or ask the benefits administrator.
- Enter the administration fee shown on the COBRA election notice. Use 2 if the notice does not state a different rate.
- Enter the number of months coverage is needed. The standard period is 18 months.
- Read the monthly premium first, then the annual and total figures.
- Compare the total with the cost of the alternatives before the election deadline.
Formula
- E
- Employee premium share in dollars per month.
- R
- Employer premium share in dollars per month.
- f
- Administration fee as a percentage, normally 0 to 2.
- m
- Months of continuation coverage, normally 1 to 36.
The base premium is the sum of both shares. The fee applies to that base, not to the employee share alone. A plan can charge less than 2 percent, and some self-funded plans absorb the cost, so use the rate on the election notice. The 36 month maximum applies to certain dependent events; a disability extension can add 11 months to an 18 month period.
Worked example
Example: $650 base premium for 18 months
Employee share $150, employer share $500, administration fee 2 percent, 18 months of coverage.
- Add the two shares: 150 + 500 = 650 dollars of base premium.
- Apply the fee: 650 x 0.02 = 13 dollars of administration cost.
- Add the fee to the base: 650 + 13 = 663 dollars a month.
- Multiply by 12: 663 x 12 = 7,956 dollars for a full year.
- Multiply by 18: 663 x 18 = 11,934 dollars for the elected period.
- The tool shows $663.00 monthly, $13.00 admin, $7,956.00 annual, and $11,934.00 total.
Reference table
| Base premium | Admin fee | Monthly cost | Annual cost |
|---|---|---|---|
| $400 | $8.00 | $408.00 | $4,896.00 |
| $650 | $13.00 | $663.00 | $7,956.00 |
| $800 | $16.00 | $816.00 | $9,792.00 |
| $1,000 | $20.00 | $1,020.00 | $12,240.00 |
| $1,200 | $24.00 | $1,224.00 | $14,688.00 |
Limits
- The calculator uses the premium shares you enter. It cannot know whether the plan has a different rate for dependents or a separate dental and vision premium.
- It assumes the 2 percent cap applies. Some plans charge less, and state continuation laws can set different rules and durations.
- It does not include deductibles, copays, coinsurance, or drug costs, so the total cost of care can be much higher than the premium.
- It does not model the 11 month disability extension or the 29 month period for a second qualifying event.
Common mistakes
- Using only the employee share from the pay stub and forgetting the employer share, which understates the premium by a large amount.
- Applying the administration fee to the employee share instead of the full base premium.
- Assuming COBRA lasts 18 months in every case when a dependent event or disability can extend it.
- Forgetting that dental and vision coverage are separate elections with separate premiums.
- Missing the 60 day election deadline while comparing plans, which can end the right to continue coverage.
Try it yourself
Quick checks. Answers sit tucked under each question.
A plan has a $500 employee share and a $300 employer share with a 2 percent fee. What is the monthly premium?
$816.00. Base $800, fee $16.00, monthly $816.00.
The same $800 base runs for 24 months at a 2 percent fee. What is the total?
$19,584.00. $816.00 x 24 = $19,584.00.
A $900 base has no administration fee and runs for 12 months. What is the monthly and annual cost?
$900.00 a month and $10,800.00 a year.
Questions
Can an employer charge more than 2 percent for COBRA?
For most group health plans the administration fee is limited to 2 percent of the premium. A plan may charge less. State continuation programs can set different limits, so check the election notice.
Does COBRA cost the same as the premium the employer paid?
It is close. The person enrolled pays the employee share plus the employer share, and may also pay up to 2 percent for administration. The plan's actual premium can change at renewal.
How long can COBRA coverage last?
The standard period is 18 months after a job loss or reduction in hours. Certain dependent events allow 36 months, and a disability extension can add 11 months in specific cases.
Can I add family members to COBRA?
Yes, if they were covered before the qualifying event or are newly eligible under the plan's rules. Each qualified beneficiary has separate election rights and the plan may charge a higher family premium.
Is COBRA cheaper than a marketplace plan?
It depends on the subsidy a household qualifies for and on the plan network. Compare the monthly premium, deductible, out-of-pocket maximum, and drug coverage, not only the sticker price.
What happens if I miss a COBRA payment?
Plans usually allow a 30 day grace period. After that the coverage can end, and reinstatement is not guaranteed. Check the payment schedule in the election notice.
Sources
- U.S. Department of Labor, COBRA continuation coverage FAQs for employers
- Centers for Medicare and Medicaid Services, COBRA fact sheet