How Expensive Is COBRA Insurance?

The Consolidated Omnibus Budget Reconciliation Act (COBRA), voted and passed by Congress in 1986, provides temporary continuation of the individual or family health coverage for workers who lost their jobs voluntarily or involuntarily, excluding termination from gross misconduct.

Payment Responsibilities

• When you and your family switch to a COBRA insurance coverage, you can remain with the same insurance coverage that you had with your previous employer for up to 18 months after termination. However, your past company no longer subsidizes your monthly insurance premium and you now stand responsible for paying the full premium amount plus a 2 percent administration fee.

COBRA Amount

• Your previous employer negotiated insurance rates for the company's employees. These vary with states, the size of the company and the type of insurance. Hence, the human resources department of your past employer must tell you what rate was agreed upon with the insurers. On the average, a family pays a monthly premium of $1,147 and an individual $421, according to a 2010 survey from the Kaiser Family Foundation.

Relief

• The Department of Defense Appropriations Act of 2010 extended the benefits of the American Recovery and Reinvestment Act of 2009. It states that the U.S. government agrees to subsidize 65 percent of COBRA premiums for 15 months of the 18 possible months for individuals who lost their job or experienced reduced work hours between Sept. 1, 2008 and May 31, 2010. The final beneficiaries of the relief program will pay their last reduced COBRA payment in August 2011, if still unemployed.