Why is COBRA so expensive?

Because the employer subsidy stops. The payroll deduction was your share of a much larger premium, and COBRA charges the whole thing plus an administrative fee.

Is COBRA ever worth it over a marketplace plan?

Mid-year, often. It keeps the same network and any deductible already met, and starting a new plan resets that deductible to zero.

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COBRA Cost Calculator

COBRA continuation cost against a marketplace plan. COBRA is typically four to five times the payroll deduction, because the employer subsidy stops and you pay the full group premium plus a fee.

Also called: cobra premium calculator, health insurance after job loss.

COBRA monthly premium

$816.00

$816.00 a month, 4.53 times the 180 you paid as an employee, because you now pay the employer share of 620 as well plus a 2% administrative fee. Over 6 months that is $4,896.00. A marketplace plan at $340.00 net of subsidy would cost $2,040.00. The marketplace plan is cheaper, though COBRA keeps your network and any deductible already met.

COBRA over the period

$4,896.00

Multiple of your old contribution

4.53

Marketplace net of subsidy

$340.00

Marketplace over the period

$2,040.00

Saving from the cheaper option

$2,856.00

Administrative fee

$16.00

Which is cheaper

The marketplace plan is cheaper, though COBRA keeps your network and any deductible already met.

How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

Employer coverage is heavily subsidised, so the payroll deduction shows only a fraction of the real premium. COBRA continues the same plan at the full group rate plus an administrative fee, which usually comes to four or five times what was deducted from pay. The comparison against a marketplace plan turns on subsidy eligibility, which depends on income after the job ends and is often larger than people expect. COBRA keeps the same network and any deductible already met, which is worth real money mid-year.

COBRA charges the full group premium plus an administrative fee, which is why it is a multiple of the payroll deduction

f: Admin fee

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a typical employer plan

What you paid as an employee: $180.00
What the employer paid: $620.00
Administrative fee: 2%
Months of coverage needed: 6
Marketplace plan premium: $520.00
Marketplace subsidy you would receive: $180.00

COBRA monthly premium$816.00

800 x 1.02; 816/180

Open this example

no employer subsidy makes COBRA close to the old cost

What you paid as an employee: $800.00
What the employer paid: $0.00
Administrative fee: 2%
Months of coverage needed: 6
Marketplace plan premium: $520.00
Marketplace subsidy you would receive: $180.00

COBRA monthly premium$816.00

boundary: only the administrative fee is added

Open this example

Method and limits

What it assumes

A standard administrative fee, which is capped by regulation.

What it deliberately does not model

Electing COBRA can disqualify marketplace subsidies for the same period in some circumstances.
A deductible already met under the employer plan carries over on COBRA and does not on a new plan.
Election deadlines are strict and missing them forfeits the option.

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Frequently asked questions

Why is COBRA so expensive?: Because the employer subsidy stops. The payroll deduction was your share of a much larger premium, and COBRA charges the whole thing plus an administrative fee.
Is COBRA ever worth it over a marketplace plan?: Mid-year, often. It keeps the same network and any deductible already met, and starting a new plan resets that deductible to zero.