| There is not one specific rate for COBRA as is often believed. COBRA is simply a law that was passed that mandates that employers who have 20 or more employees have to make available to departing employees health insurance for up to 18 months (36 months in some situations).
If you've been on an employer's group health plan, they have likely contributed a majority of the total cost. Your monthly contribution that is withheld from your check is typically just a small portion of the total cost. Upon leaving employment, your employer has 30 days to get you paperwork offering you the same health insurance plan you've been enrolled on. If you want to stay on this health insurance plan, you will now have to pay the ENTIRE cost yourself (plus potentially an additional 2%). You have 60 days to notifying them that you would like to accept COBRA. If you do not want to accept it, there is nothing you need to do.
As you look to purchase Individual coverage on your own, the following should be helpful:
1.) Rates are based upon your gender and age; rates get more expensive for older people; women are typically more expensive than men (until around age 50-55), than men become more expensive
2.) Group rates are most often “Composite Rates”; which means regardless of age or gender, rates are the same; an 18-year-old single male will be the same rate as a 63-year-old single female.
3.) Often times COBRA rates are about the same or less than Individual rates for someone approaching Medicare age, while COBRA rates might be 300% - 400% more than Individual rates for someone in their 20’s.
4.) You can elect to take COBRA just for select family members and the rate will reflect only those people taking COBRA. Example: Your whole family (Dad, Mom & two kids) is on the plan through work. Dad is the employee. The employer sends out paperwork showing COBRA costing $1,200 per month for the family. Mom has some major medical conditions, but Dad & two kids are perfectly healthy. Mom can get COBRA by herself, while Dad & two kids go and buy an Individual plan for themselves separately. Mom should expect to pay $400 for her COBRA
5.) Typical ratios for employer sponsored plans are 1 : 2 : 1.8 : 3 (Employee; Employee + Spouse; Employee + Child(ren); Employee + Family) which means; Employee & Spouse rates are about 200% of the single rate; Employee + Child(ren) are about 180% of the single rate; Employee + Family rates are about 300% of the single rate. Average single rates today are around $300 - $400.
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