COBRA Cost Calculator

COBRA lets you keep your exact same plan, at a very different price

Losing employer-sponsored health coverage — through a layoff, a voluntary departure, a reduction in hours, or several other qualifying events — comes with the option to continue that exact same coverage through COBRA, the federal law that requires most employer plans to offer continuation coverage. The plan, the network, the deductible already accumulated for the year — all of it stays identical. What changes dramatically is who pays for it.

While employed, your employer was almost certainly covering a substantial share of the total premium, with only a fraction showing up as a payroll deduction. COBRA requires paying the full combined premium — both shares — plus a 2% administrative fee the law permits the plan to add, which is exactly why the jump in cost catches so many people by surprise the first time they see the actual COBRA premium quote.

Where the 2% administrative fee comes from

Federal COBRA law caps what a plan can charge at 102% of the full premium for most qualifying events — the extra 2% covers the plan’s administrative cost of continuing coverage for someone no longer actively employed. This is a modest addition relative to the much larger jump from losing the employer’s premium subsidy entirely, but it is worth knowing the 2% is a legally capped maximum, not an arbitrary markup, and it applies consistently regardless of which specific plan or employer is involved.

A narrower category of qualifying events (certain disability extensions) can permit a higher administrative fee for an extended coverage period — confirm the specific fee that applies to your qualifying event and coverage duration with the plan administrator rather than assuming the standard 2% universally applies to every scenario.

How long COBRA actually lasts

For the most common qualifying event — job loss or a reduction in hours — COBRA continuation coverage is generally available for up to 18 months. Certain other qualifying events, such as divorce or a dependent losing eligible-dependent status, can extend availability longer for the specifically affected individual, sometimes up to 36 months under certain circumstances.

This duration matters for planning purposes beyond the immediate cost question — COBRA is explicitly a bridge, not a permanent solution, and knowing the actual coverage window helps frame how many months of this higher-cost premium you are actually budgeting for versus when a longer-term plan, new employer coverage, or Medicare eligibility takes over.

The marketplace alternative is worth pricing directly, not assumed

A Health Insurance Marketplace plan is available as an alternative during the same coverage gap, and losing employer coverage is itself a qualifying life event that opens a special enrollment window outside the standard annual open enrollment period.

Marketplace premiums can be meaningfully lower than COBRA’s full-premium structure, particularly for anyone whose household income during the gap qualifies for premium tax credits — a genuine possibility for someone between jobs with reduced income during that specific period. The comparison is not premium alone, though: a marketplace plan may carry a different network, a fresh deductible starting from zero even if the COBRA plan’s deductible was partially met for the year already, and different drug formulary coverage — all worth weighing alongside the direct cost difference this calculator surfaces.

The election window gives you time to actually compare, without an immediate coverage gap

COBRA election generally is not an immediate, forced decision — there is commonly a 60-day window from the later of the coverage loss date or receiving the formal COBRA election notice to decide, and electing within that window typically allows retroactive coverage back to the original loss date if you do choose COBRA.

This structure means you can use that window to shop and compare a marketplace alternative without risking an actual gap in coverage, provided you make a final decision — and pay any required retroactive premium if electing COBRA — within the deadline. Missing the election window entirely forfeits COBRA eligibility, so treat the deadline itself as a hard constraint even while comparing options.

Where this cost fits into a broader transition budget

For anyone negotiating a severance package or planning a gap between jobs, COBRA cost is frequently one of the largest and most underestimated monthly expenses during that transition period — worth pricing explicitly rather than assumed to be a minor add-on to lost income.

The severance pay guide covers how a severance package interacts with this exact gap, and for anyone specifically bridging the years before Medicare eligibility rather than a shorter between-jobs gap, the retirement healthcare cost calculator covers that longer, related bridge-coverage scenario in more depth.