COBRA Health Insurance Cost Calculator
Estimate COBRA health insurance costs after job loss compared to marketplace plans. Calculate premiums, subsidies, and find the most affordable coverage
COBRA Health Insurance Cost Calculator
Calculator
Adjust values & calculateEnter your values below. Every result is computed in your browser — no data is sent to any server.
Formula: COBRA Monthly = Employer Premium x 1.02
Worked example — COBRA: $3,672 | Marketplace: $2,700 | With Subsidy: $810 | Best option: Marketplace with subsidy saves $2,862
Formula
COBRA Monthly = Employer Premium x 1.02
COBRA requires payment of 102% of the full group health plan premium (the employer and employee portions combined, plus a 2% administrative fee). Marketplace subsidies are calculated based on income relative to the Federal Poverty Level.
Worked Examples
Example 1: Individual Coverage After Job Loss
Problem:An individual with a $600/month employer premium loses their job and needs 6 months of coverage. Marketplace alternative costs $450/month. Monthly income from unemployment is $2,800.
Solution:COBRA monthly = $600 x 1.02 = $612 COBRA 6-month total = $612 x 6 = $3,672 Marketplace 6-month total = $450 x 6 = $2,700 Difference = $3,672 - $2,700 = $972 Income as % of FPL = ($2,800 x 12) / $15,060 = 223% Estimated subsidy at 223% FPL = ~70% = $315/mo Subsidized marketplace = $450 - $315 = $135/mo Subsidized total = $135 x 6 = $810
Result:COBRA: $3,672 | Marketplace: $2,700 | With Subsidy: $810 | Best option: Marketplace with subsidy saves $2,862
Example 2: Family Coverage Comparison
Problem:A family with a $1,500/month employer premium needs 12 months of coverage. Marketplace family plan costs $1,200/month. Monthly income is $6,000.
Solution:COBRA monthly = $1,500 x 1.02 = $1,530 COBRA 12-month total = $1,530 x 12 = $18,360 Marketplace 12-month total = $1,200 x 12 = $14,400 Difference = $18,360 - $14,400 = $3,960 Income as % of FPL = ($6,000 x 12) / $15,060 = 478% At 478% FPL, no subsidy applies COBRA as % of income = $1,530 / $6,000 = 25.5%
Result:COBRA: $18,360 | Marketplace: $14,400 | Savings: $3,960 | COBRA consumes 25.5% of income
Frequently Asked Questions
What is COBRA insurance and who is eligible?
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that allows employees and their dependents to continue their employer-sponsored health insurance coverage after experiencing a qualifying event such as job loss, reduction in work hours, divorce, or death of the covered employee. To be eligible, the employer must have had 20 or more employees and must have offered a group health plan. COBRA coverage is available for 18 months after most qualifying events, 29 months if the beneficiary is disabled, and up to 36 months for dependents after events like divorce or the employee becoming eligible for Medicare. The key benefit is continuity of coverage with the same doctors, network, and plan benefits you had while employed.
How much does COBRA cost compared to employer-sponsored insurance?
COBRA premiums are significantly higher than what employees pay for employer-sponsored insurance because the employee must pay the entire premium amount plus a 2% administrative fee. When employed, most workers pay only 20-30% of their health insurance premium, with the employer covering the remaining 70-80%. Under COBRA, you pay 102% of the total plan cost. For example, if the full premium for individual coverage is $600 per month and your employer was paying $420 while you paid $180, your COBRA cost would be $612 per month, representing a 240% increase in your out-of-pocket expense. For family coverage, this increase can be even more dramatic, with monthly premiums commonly exceeding $1,500 to $2,000 under COBRA.
What are marketplace alternatives to COBRA coverage?
The Health Insurance Marketplace (healthcare.gov) offers an important alternative to COBRA that may be significantly cheaper, especially for those who qualify for premium tax credits (subsidies). Losing employer coverage triggers a Special Enrollment Period of 60 days, allowing you to purchase a marketplace plan outside of open enrollment. Marketplace plans come in metal tiers: Bronze (lowest premium, highest cost-sharing), Silver, Gold, and Platinum (highest premium, lowest cost-sharing). Premium subsidies are available based on income and can dramatically reduce monthly costs. Additionally, silver-tier plans offer extra cost-sharing reductions for those earning between 100% and 250% of the federal poverty level. Many people find marketplace plans with subsidies cost significantly less than COBRA while providing comparable or better coverage.
How do I decide between COBRA and a marketplace plan?
The decision between COBRA and a marketplace plan depends on several factors including cost, provider access, ongoing medical needs, and expected duration of need. Choose COBRA if you are in the middle of treatment with specific doctors who are not available on marketplace networks, if you have already met your deductible for the year, or if the short-term premium difference is manageable. Choose a marketplace plan if you qualify for premium subsidies that make it significantly cheaper, if your income has dropped substantially after job loss, if you need coverage for more than 18 months, or if your COBRA premium would consume more than 10% of your monthly income. You have 60 days from your job loss to elect COBRA and the same 60 days for a marketplace Special Enrollment Period, so compare both options carefully before deciding.
Are there any tax benefits or subsidies for COBRA premiums?
Currently there is no ongoing federal subsidy specifically for COBRA premiums, though temporary subsidies have been enacted during economic downturns such as the COBRA subsidy included in the American Recovery and Reinvestment Act of 2009 and the American Rescue Plan Act of 2021. However, COBRA premiums may be tax-deductible if you itemize deductions and your total medical expenses exceed 7.5% of your adjusted gross income. If you are receiving unemployment benefits, the premiums can be included in that medical expense calculation. Additionally, some states offer their own mini-COBRA laws that extend coverage to employees of smaller companies not covered by federal COBRA. It is worth noting that choosing a marketplace plan instead may provide much larger effective subsidies through premium tax credits, potentially saving hundreds of dollars per month compared to COBRA.
How do COBRA payment deadlines and the grace period work?
COBRA runs on three clocks. You generally have 60 days from the later of the qualifying event or the election notice to elect, then 45 days from election to send the first premium, which covers every month retroactive to the date coverage lapsed. After that, each monthly premium carries a 30-day grace period. Miss it and the plan may terminate coverage with no obligation to reinstate. If an 11-month disability extension applies, the plan is permitted to charge up to 150 percent of the group premium for those extra months rather than the usual 102 percent.
Does electing COBRA reset my deductible and out-of-pocket maximum?
No. COBRA continues the same group health plan, so your accumulated deductible, coinsurance and out-of-pocket maximum for the plan year carry over untouched, along with the same network and formulary. That continuity is the strongest argument for paying the higher premium if you are mid-treatment or have already spent heavily this year. Switching to a marketplace plan instead starts a fresh deductible and out-of-pocket maximum from zero, which can wipe out an apparent premium saving for anyone with significant claims already on the books.
Can I drop COBRA later and switch to a marketplace plan?
Only at limited times. Exhausting COBRA when the 18, 29 or 36 month maximum runs out is itself a qualifying event and opens a Special Enrollment Period. Voluntarily dropping COBRA in the middle of the term, or losing it for non-payment, generally is not, so you would have to wait for the next open enrollment. This is why the comparison matters up front: choosing COBRA can lock in the higher premium for the rest of the plan year, and the calculator's month-by-month cumulative totals are meant to show what that commitment adds up to.
Why is the subsidy shown here only a rough estimate?
The premium tax credit is not a fixed percentage of whatever plan you pick. It is the gap between a capped share of your household income and the cost of the benchmark second-lowest-cost silver plan in your rating area, so it varies with age, ZIP code, household size and the plans actually offered locally. This tool applies a simplified band based on income relative to the federal poverty level for a single person. Household size and the annual FPL update both shift the answer, so confirm eligibility on healthcare.gov.
What is state mini-COBRA and how does it differ from federal COBRA?
Federal COBRA applies only to employers that maintained 20 or more employees, which leaves many small-business workers outside it. Most states fill part of that gap with continuation statutes, often called mini-COBRA, covering smaller group plans. The rules differ by state: the maximum continuation period is frequently shorter than 18 months, the permitted administrative loading may not match the federal 2 percent, and election windows vary. If your former employer was small, verify with the state insurance department which continuation rules apply before assuming the federal timeline.
References
Reviewed for accuracy by Raz Mohammad, Tax & Salary Specialist · Editorial policy
Related Calculators
🧮Employee Cost Calculator
Calculate the true total cost of an employee including salary, benefits, taxes, and overhead.
🧮Gross to Net Pay Calculator
Calculate take-home pay from gross salary after federal, state, FICA, and other deductions.
🧮Hourly Pay Calculator
Convert between hourly, daily, weekly, biweekly, monthly, and annual pay.
🧮Pay Raise Percentage Calculator — Old vs New Salary
Calculate the percentage increase or decrease between your old and new salary.
🧮Back Pay Calculator
Calculate back pay owed from start date to end date based on correct vs actual pay rate.
🧮Shift Differential Calculator
Calculate shift differential pay for night, weekend, and holiday shifts.
🧮Per Diem Calculator
Calculate government per diem rates for meals and lodging by city and travel dates.
🧮Mileage Reimbursement Calculator
Calculate IRS standard mileage reimbursement for business, medical, and charitable driving.