COBRA costs 102-105% of the group premium — full cost plus a small admin add. Family coverage, disability extensions, and state subsidies change the math; compare every month to the marketplace, not once.
The Premium Lines
- Full cost: employee + employer share + 2%; subsidy months are a severance ask — see the severance scripts guide.
- Family lines: dependent coverage follows the plan; loss of a dependent opens a 60-day special enrollment (see the continuation guide).
- Disability: 29-month extension with SSA determination; the SGA interaction is in the SGA guide and the SSDI stack in the SSDI guide.
State continuation fills small-business gaps (see the continuation guide), open enrollment sets the annual baseline in the enrollment guide, and the 60-day clock is in the exit checklist. The cash plan covers premium months in the 30-day plan.
Put the rule into action
Write the letter with the free COBRA Election Notice Letter generator. The state pages carry the local payout and notice windows, and the application tracker keeps the follow-up date in writing.
Put the rule into action
What COBRA actually costs
COBRA lets you keep the group plan after coverage ends, at up to 102% of the group premium: your share plus the employer's share, plus the 2% administration allowance. It applies to employers with 20 or more employees, runs up to 18 months, and can be retroactive if you elect and then face a claim.
The election window is 60 days, measured from coverage ending or from the election notice, whichever is later. Family coverage continues on the same terms after divorce, death, or a child aging out. Small employers, self-insured plans, and state-regulated plans sit under state continuation law instead, and the federal window does not automatically apply there.
The premium is not a fixed quote: the group rate is set by the employer's renewal, so the number you see in the election notice is the number to run, and the number you see next year may not be the same.
The math, in three lines
Take the family premium from the election notice, multiply by 102 percent of the group premium, and count the months you actually need. Then compare a marketplace quote for the same months.
- Line 1: monthly group premium x 102% = COBRA monthly cost.
- Line 2: months needed x line 1 = COBRA total.
- Line 3: marketplace premium after the subsidy for the same months = the competing total.
The subsidy is set from projected income, not last year's, so an income drop after the layoff usually makes line 3 the cheaper route. Run both in the COBRA cost calculator before the 60 days end; the ACA special enrollment entry explains why losing employer coverage opens a marketplace window at all, and the state continuation entry covers plans COBRA does not reach.
Deadlines and traps
Miss the election window and coverage is gone for the year in most state-only plans. Waive COBRA and you may lose the right to elect later for the same qualifying event. Drop a premium and coverage ends retroactively, which can unwind a claim already processed.
Two numbers to collect in writing: the coverage end date, and the premium quoted with the 2% allowance shown separately. The COBRA election notice generator puts the election, the end date, and the quoted premium in one dated letter. Ask which law governs your plan before you elect: federal COBRA or state continuation, because the window and the length differ.
Then check the other coverage clock: COBRA can be replaced mid-term by a marketplace plan only at the annual open enrollment or a qualifying event, so the open enrollment entry is worth reading before you commit to 18 months of premium.
Scripts and wording
"My coverage ends [date]. Please send the election notice with the monthly premium shown as the group rate and the 2% allowance separately, the election deadline, and confirmation of whether my plan is under federal COBRA or state continuation law. I will compare these figures against a marketplace quote before electing."
Ask for the breakdown, not a total. A total without the allowance line is not comparable to a marketplace quote.
The premium lines compared
| Line | What it includes | Watch |
|---|
| Full premium | Employee share plus employer share plus a small add-on | The 102% figure |
|---|
| Family tiers | Employee-plus-spouse and family lines | The tier jump is often the largest cost |
|---|
| Disability extension | Extended by a disability determination, on the plan's own terms | Requires the disability determination |
|---|
| Marketplace comparison | Subsidy set from projected income | A mid-year pay drop usually wins |
|---|
For the current text behind these numbers, start with the California COBRA rule page and the New York COBRA rule page, along with the workplace remote reviews guide hub. Those sources state the rule in full; this page only points at them.
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Frequently Asked Questions
- How much can COBRA legally cost?
- Up to 102% of the group premium for the same coverage: your share, the employer's share, and a 2% administration allowance. Ask for the group rate and the allowance as separate lines so you can compare against a marketplace quote. Read the COBRA entry for the ceiling and the 18-month term.
- How long do I have to elect?
- 60 days from coverage ending or from the election notice, whichever is later. State continuation plans do not necessarily follow that window, and missing a state deadline is usually final for the year. Ask which law governs before the clock starts.
- Is a marketplace plan cheaper than COBRA?
- Often, because the subsidy is computed from projected income rather than last year's. Run the COBRA total and the marketplace total for the same months in the COBRA cost calculator, then decide inside the 60-day window. See COBRA versus the ACA marketplace.
- My employer has fewer than 20 people. Am I covered?
- Not by federal COBRA. State continuation law covers small employers, self-insured plans, and state-regulated plans, and some states run past 18 months, add dental and vision, or cap the premium. The state continuation entry explains the difference and the paired election letter generator writes the ask.
A premium quote is a plan number, and the 60-day election window is a federal rule; the length of continuation past 18 months is a state rule graded from reported sources in this build. Confirm the continuation length with the state agency named on the state rule pages before you commit to 12 months of payments, and put the premium and the months through the COBRA cost calculator so the marketplace comparison sits beside the quote in the same file.