1. What is the COBRA Cost Calculation?

The COBRA cost calculation estimates the total cost of continuing health insurance coverage under COBRA (Consolidated Omnibus Budget Reconciliation Act) for a specified period, typically 18 months, including a 2% administrative fee.

2. How Does the Calculator Work?

The calculator uses the COBRA cost equation:

Where:

• \( Monthly\_premium \) — Monthly premium amount in dollars
• \( Term \) — Coverage duration in months (typically 18)
• \( Admin\_fee \) — Administrative fee multiplier (typically 1.02 for 2%)

Explanation: The equation calculates the total cost by multiplying the monthly premium by the number of months and including the administrative fee.

3. Importance of COBRA Cost Calculation

Details: Understanding your total COBRA costs helps in financial planning when transitioning between jobs or losing employer-sponsored health coverage.

4. Using the Calculator

Tips: Enter your monthly premium in dollars, the coverage term in months (typically 18), and the administrative fee multiplier (typically 1.02). All values must be valid (premium > 0, term > 0, fee ≥ 1).

5. Frequently Asked Questions (FAQ)

Q1: Why is the typical term 18 months?
A: COBRA generally allows continuation coverage for up to 18 months after qualifying events like job loss or reduced work hours.

Q2: Is the 2% admin fee standard?
A: Yes, COBRA allows employers to charge up to 102% of the premium cost (100% + 2% admin fee).

Q3: How is the monthly premium determined?
A: The premium is typically the full cost of your health plan (both employer and employee shares) plus the admin fee.

Q4: Are there circumstances with longer coverage?
A: In certain cases (like disability or second qualifying event), coverage may extend to 29 or 36 months.

Q5: Can I use this for state continuation coverage?
A: Some states have "mini-COBRA" laws with different rules. Check your state's specific regulations.