Job Transitions and Your Health Coverage
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), workers who leave their jobs can continue their employer-sponsored health insurance coverage. While this protects you from gaps in medical coverage, it comes with a major financial shock.
When you transition to COBRA, you lose your employer's premium contribution and must pay 100% of the premium cost yourself, plus a 2% administrative fee.
How the Premium math Works
On average, US employers cover 70% to 85% of their employees' healthcare premium costs. Here is the difference in take-home costs during employment vs COBRA transition:
| Expense Item | While Employed | Under COBRA |
|---|---|---|
| Employee Share | $150 / month (Example) | $600 / month (Full Premium) |
| Employer Share | $450 / month (Paid by company) | $0 / month (Lost subsidy) |
| Admin Fee | $0 / month | 12% - 2% surcharge ($12 / month) |
Try the Live Understanding COBRA Health Insurance
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