COBRA Insurance Explained

COBRA insurance enables qualified, recently separated employees to continue their group coverage by assuming responsibility for the total premium (plus a 2% administrative fee) for their coverage. COBRA is generally available for qualified individuals leaving a company with 20 or more employees. But some states have created COBRA-like programs for groups of less than 20 full time employees.

COBRA Insurance Extends Group Coverage Temporarily

• Allows for an extension of group benefits for a period of up to 18 months in most cases. In some instances COBRA can be extended for up to 36 months.
• You get the same coverage as your former employer offers existing employees (assuming your former employer is still in business).
• You pay the full cost of the coverage, plus a 2% administrative fee.
• Full premium means any amount you contributed, PLUS what your employer contributed, PLUS the 2% fee.
• Exhausting COBRA coverage is required for HIPAA eligibility.

Cost: Employer Sponsored vs. COBRA

While Employed	Enrolled In COBRA
Family of four, age 30-39	Family of four, age 30-39
PPO, $250 deductible	PPO, $250 deductible
Monthly premium: $731.00	Monthly premium: $731.00
Employer pays 90%: $657.90	You pay 102%: $745.62
You pay 10%: $73.10

Things to consider when deciding if the COBRA coverage you have been offered is your best option are:

• Whether or not you prefer the comprehensive benefits and don’t mind the added cost
• Whether you are willing to exchange continual, guaranteed coverage for an added cost.
• If you have had recent health problems.
• If you have had ongoing health problems.
• If you require expensive medications.
• Whether or not you have been declined for private insurance recently.
• If you are currently pregnant.
• If you found a new job and your new employer does not offer a health plan.

If you answered “yes” to any of the above, continuing with your COBRA coverage may be the best option for you. You might consider individual insurance as an alternative to COBRA coverage.