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Losing employer-sponsored health insurance triggers a financial shock that few people anticipate: the full premium your company was quietly absorbing becomes your responsibility. A COBRA calculator exposes that number before you commit. It takes your prior plan's total premium, applies the federal 102% rule, and projects your monthly and total costs across the 18 to 36 months of continuation coverage. For anyone weighing COBRA against a marketplace plan, that calculation is the difference between a confident decision and an expensive guess.
The Consolidated Omnibus Budget Reconciliation Act, passed in 1985, requires most employers with 20 or more employees to offer temporary continuation of group health coverage after a qualifying event. It is not a government insurance program. It is a federal mandate that preserves your access to the same plan your employer provided, at your own expense.
Federal COBRA applies to private-sector group health plans, as well as state and local government plans. It does not extend to federal government plans, churches, or certain church-related organizations. Part-time employees count toward the 20-employee threshold as fractions of a full-time worker — a 20-hour-per-week employee counts as 0.5, for instance.
Qualified beneficiaries include the covered employee, their spouse or former spouse, and dependent children. Under specific circumstances, retired employees and their families may also qualify if the employer declares bankruptcy. The coverage itself must match what active employees receive: the same deductibles, co-pays, networks, and open enrollment rights. If the employer changes the plan for active workers, those changes flow through to COBRA participants.
Eligibility rests on three requirements. First, your group health plan must be subject to COBRA. Second, a qualifying event must occur. Third, you must have been covered under the plan the day before that event.
Qualifying events differ by who experiences them. For the employee, job loss (except for gross misconduct) and a reduction in work hours below the benefit threshold are the two primary triggers. For the spouse and dependents, the list expands: termination of the employee's employment, reduction in hours, divorce or legal separation, death of the covered employee, loss of dependent child status, and in limited cases, the employee's Medicare eligibility.
A date calculator can help you track the 60-day election window and the coverage period, but the employer's plan administrator must issue the election notice within 44 days of the qualifying event. The clock starts on the later of the coverage loss date or the notice date, which in practice gives most people more breathing room than they expect.
The math is straightforward once you understand the components. Under federal rules administered by the Department of Labor, the maximum COBRA premium equals 100% of the full group premium — the employer's share plus your former employee share — plus a 2% administrative fee. That works out to 102% of the total premium.
While employed, you saw only your payroll deduction. Employers typically cover 70% to 80% of the total premium, according to industry data. COBRA reveals the true cost. If your plan's total monthly premium was $700 and your payroll deduction was $125, your COBRA premium becomes $714 ($700 plus 2%). That is a 471% increase in your out-of-pocket cost.
For disability extensions beyond 18 months, the plan can charge up to 150% of the premium. The 2% administrative fee is a maximum, not a mandatory minimum. Some employers waive it. Most charge the full amount.
Premiums lock at the rate in effect when you elect. If your former employer raises premiums mid-year, your COBRA cost rises with them. There is no rate freeze. Most plans reset billing annually, so increases typically arrive at the start of the plan year.
A dedicated COBRA calculator automates the 102% formula and projects costs across the coverage period. You need three inputs: the full monthly premium your employer paid (including their share), your former payroll deduction, and the number of coverage months you are considering.
The calculator outputs three figures that matter. The monthly COBRA premium shows what you will pay each month. The total cost over 18 or 36 months reveals the full financial commitment. The increase over your prior contribution quantifies exactly how much more expensive continuation coverage is compared to what you were used to.
In 2026, average COBRA costs run approximately $700 to $750 per month for individual coverage and $1,900 to $2,100 for family coverage, before administrative fees. Over 18 months, individual coverage can total $12,600 to $13,500, while family coverage can reach $34,200 to $37,800. Those totals often exceed what a subsidized marketplace plan would cost.
The Affordable Care Act marketplace is the most common alternative to COBRA, and for many people it is dramatically cheaper. Losing employer coverage triggers a Special Enrollment Period, giving you 60 days to enroll in a marketplace plan — the same window you have to elect COBRA.
The cost comparison depends almost entirely on whether you qualify for premium tax credits. If your household income falls below 400% of the Federal Poverty Level, you may be eligible for subsidies that reduce your marketplace premium. In 2026, the enhanced subsidies that removed the 400% cap expired, meaning the subsidy cliff has returned. Households earning above the threshold face the full unsubsidized premium.
| Factor | COBRA | Marketplace Plan |
|---|---|---|
| Monthly cost (individual) | $700–$750 | $148–$477 (with/without subsidies) |
| Monthly cost (family) | $1,900–$2,100 | $645–$1,230 (with/without subsidies) |
| Coverage period | 18–36 months | Permanent (renewable annually) |
| Network | Same as prior employer plan | New network; may need new doctors |
| Subsidies available | No | Yes, income-based |
| Deductible continuity | Preserved from prior plan year | Starts fresh |
COBRA wins when continuity carries outsized value. If you are mid-treatment, have already met your deductible, or need to stay with a specific specialist, the seamless transition justifies the higher premium. A health insurance cost estimator can model your specific situation against both options.
Marketplace coverage wins on cost in the majority of cases. Subsidized plans often cost 50% to 70% less than COBRA for comparable coverage. The trade-off is a new network and a fresh deductible, which matters if you expect significant medical expenses in the near term.
If your employer has fewer than 20 employees, federal COBRA does not apply. Many states fill that gap with "mini-COBRA" laws that require fully insured group plans to offer continuation coverage. These state programs vary widely. Some provide 9 months of coverage, others up to 18. Premium rules differ — some cap the administrative fee lower than 2%, and some impose different eligibility conditions.
State continuation laws generally apply only to fully insured plans, not self-funded ones. If your small employer self-funds its health plan, state continuation may not be available. Checking your state's insurance department rules is the only way to know what applies to your situation.
You have exactly 60 days to elect COBRA, starting from the later of two dates: the date you lose coverage, or the date the plan administrator sends your election notice. The notice must go out within 44 days of the qualifying event, so in practice the notice date almost always controls.
Election is retroactive. If you wait 59 days and then enroll, your coverage is continuous from the date you lost employer coverage. This creates a valuable option: you can wait to see whether you need medical care, then elect COBRA retroactively if you do. The catch is that you must pay premiums for the full retroactive period in a lump sum. If you waited 59 days, that first payment could cover two months of premiums at once.
The standard COBRA period is 18 months for job loss or reduced hours. Two extensions can push that further. If a qualified beneficiary is determined by the Social Security Administration to have been disabled at the time of the qualifying event or within the first 60 days of COBRA coverage, the period extends to 29 months. During the additional 11 months, the plan can charge up to 150% of the premium.
Dependents face different timelines. A spouse or dependent child who loses coverage due to divorce, death of the covered employee, or loss of dependent status can receive up to 36 months of COBRA. If the employee becomes eligible for Medicare, the spouse and dependents may continue COBRA for up to 36 months even if the employee's coverage ends.
The plan must allow a child born to or placed for adoption with a covered employee during the COBRA period to be added as a qualified beneficiary. This applies regardless of whether the child was covered before the qualifying event.
If you are already enrolled in Medicare when you lose employer coverage, you can still elect COBRA. Medicare becomes your primary insurance, and COBRA acts as secondary coverage. This can be useful for filling gaps in Medicare coverage, but it is rarely cost-effective compared to a Medicare Supplement plan.
If you become eligible for Medicare while on COBRA, the situation reverses. In most cases, COBRA coverage ends when Medicare begins. You must enroll in Medicare Part B during your Initial Enrollment Period to avoid late enrollment penalties and gaps in coverage. Your spouse and dependents may remain on COBRA for up to 36 months even if your coverage terminates.
COBRA premium = full group premium (employer share + employee share) + 2% administrative fee. For disability extensions beyond 18 months, the plan can charge up to 150% of the premium.
Federal COBRA does not apply to employers with fewer than 20 employees. However, many states have "mini-COBRA" laws that provide similar continuation coverage for small employers, typically lasting 9 to 18 months.
Yes. If you elect COBRA within the 60-day window, coverage is retroactive to the date you lost employer coverage. You will need to pay premiums for the retroactive period.
Medicare becomes your primary insurance at 65. COBRA may end or become secondary. You should enroll in Medicare Part B during your Initial Enrollment Period to avoid gaps in coverage and late enrollment penalties.
Yes. Losing COBRA coverage or dropping it voluntarily does not trigger a Special Enrollment Period. However, you can enroll in a marketplace plan during Open Enrollment or if you qualify for a Special Enrollment Period through another qualifying event.
In sum, a COBRA calculator transforms an opaque financial obligation into a visible, comparable number. It shows you the true cost of continuity — what you gain in seamless coverage and what you surrender in premium dollars. Whether you are weighing a 60-day election window, comparing marketplace subsidies against the 102% rule, or planning for the 29-month disability extension, the calculator gives you the figure that makes the decision concrete. Use the COBRA cost calculator above, enter your plan's actual premium figures, and treat the result as what it is: a precise estimate of the most expensive — and most seamless — path to staying insured.