COBRA Insurance Cost Calculator

What Is COBRA Insurance?

COBRA is a federal law passed in 1986 (Consolidated Omnibus Budget Reconciliation Act) that gives workers and their families the right to continue employer-sponsored group health coverage after a qualifying event that would otherwise cause them to lose that coverage. It applies to employers with 20 or more employees in the private sector, as well as state and local governments. It does not apply to the federal government, churches, or very small employers with fewer than 20 employees.

Under COBRA, you can keep the exact same health insurance plan you had while employed — same doctors, same deductibles, same prescription drug coverage — but you must pay the full premium yourself, including the portion your employer previously covered, plus a small administration fee of up to 2%. This means your monthly cost can increase dramatically compared to what you paid as an employee.

The law was originally enacted to address the problem of "job lock" — where employees felt trapped in jobs they might otherwise leave because they feared losing health coverage. While COBRA doesn't completely solve this issue, it does provide a bridge that gives workers more flexibility in career transitions.

Who Is Eligible for COBRA?

Not everyone qualifies for COBRA coverage. To be eligible, you must have been covered by a group health plan on the day before the qualifying event occurred. The plan must be sponsored by a private-sector employer with 20 or more employees, or by a state or local government. If your employer had fewer than 20 employees, you may still have continuation rights under your state's "mini-COBRA" laws, which vary by state.

Qualified beneficiaries include not just the covered employee but also the employee's spouse, former spouse, dependent children, and in some cases, a child born or adopted during the COBRA coverage period.

How to Elect COBRA Coverage

When a qualifying event occurs, your employer's plan administrator must send you a COBRA election notice within 14 days (or within 44 days if the employer is notified later). You then have 60 days from the later of the date coverage would end or the date the notice is sent to elect coverage. During this time, you can carefully evaluate your options — COBRA versus an ACA marketplace plan or other coverage alternatives.

If you elect COBRA, you typically have 45 days from the date of election to make your first premium payment. Coverage is retroactive to the date you lost employer coverage, so there is no gap as long as you elect and pay on time. After the initial payment, premiums are due monthly, and there is typically a 30-day grace period.

While COBRA provides important continuity of care, it is often more expensive than alternatives like ACA marketplace plans, which may offer premium subsidies based on your income. According to KFF, the average annual premium for employer-sponsored health insurance in 2025 was $8,951 for single coverage and $25,116 for family coverage, meaning COBRA could cost $760 and $2,135 per month respectively after the 2% admin fee.

COBRA vs ACA Marketplace: Which Should You Choose?

When you lose employer-sponsored health coverage, you typically have two main options to replace it. Understanding the trade-offs between COBRA and ACA Marketplace plans is critical to making an informed decision that balances cost, coverage continuity, and provider access.

When COBRA Makes Sense

• You've already met your deductible — If you've already paid a significant portion of your annual deductible, sticking with COBRA means those expenses count toward your out-of-pocket maximum without resetting. Starting a new ACA plan means beginning from zero on a new deductible, potentially costing you more out-of-pocket in the short term.
• Ongoing medical treatment — If you're in the middle of a treatment plan with specific providers, COBRA ensures continuity with the same doctors, hospitals, and coverage terms. This is especially important for pregnancy, cancer treatment, surgery recovery, or chronic condition management.
• High household income — ACA subsidies phase out at higher income levels (above 400% of the federal poverty level, roughly $60,000+ for a single person in 2026). If your modified adjusted gross income exceeds this threshold, you won't qualify for premium tax credits, making COBRA potentially comparable in price.
• Short-term gap — If you expect to have new employer coverage within a few months (e.g., you have a job offer starting soon), COBRA's simplicity and continuity can be worth the premium. You can also delay your election — remember you have 60 days to decide, and coverage is retroactive.
• Narrow provider networks concern you — ACA marketplace plans, especially lower-tier Bronze and Silver plans, often have narrower provider networks. If you have specific doctors or specialists you must keep, COBRA preserves your existing network.

When ACA Marketplace Makes Sense

• You qualify for subsidies — Most people who lose job-based coverage qualify for premium tax credits that can dramatically reduce monthly costs. According to KFF, over 80% of marketplace enrollees receive subsidies, with average monthly premiums after subsidies around $100–$200 for Silver plans in 2025.
• Lower out-of-pocket costs — Silver plans on the marketplace offer cost-sharing reductions (CSRs) for individuals earning up to 250% of the federal poverty level. These CSR plans significantly reduce deductibles and copays, making healthcare more affordable when you need it.
• More plan choices — The marketplace offers multiple tiers (Bronze, Silver, Gold, Platinum) with varying premium/deductible trade-offs. You can select a plan that matches your expected healthcare needs for the year rather than being locked into your former employer's single plan design.
• You expect a long coverage gap — COBRA costs add up quickly. For a full 18 months, the average single plan could cost over $13,000, while an ACA Silver plan after subsidies might cost $3,000–$5,000 total over the same period.
• Your income has dropped — Job loss often means reduced income, which increases your eligibility for ACA subsidies. The lower your income, the more generous the premium tax credits — making ACA plans dramatically cheaper than COBRA.

How to Compare Effectively

Before making a decision, follow these steps:

1. Get your COBRA election notice — This will list the exact COBRA premium you'll pay. Use this calculator to understand the breakdown.
2. Visit Healthcare.gov — Enter your expected income for the year to see what ACA plans would cost after subsidies. This is free and doesn't require enrollment.
3. Compare total costs — Look at premiums + deductibles + estimated copays for both options. Don't just compare monthly premiums.
4. Check your provider network — Make sure your preferred doctors and hospitals are in-network for any ACA plan you're considering.
5. Consider your deductible progress — If you've already met $3,000 of a $5,000 deductible, COBRA saves you $2,000 in potential out-of-pocket costs.

Frequently Asked Questions About COBRA