COBRA cost calculator to estimate monthly and total continuation premiums from employee and employer shares, fees, coverage months, and a target subsidy.
COBRA Cost Formula
The employee often sees only part of the group health premium while employed. A COBRA premium can include both the employee and employer portions plus an administrative charge:
Monthly COBRA Cost = (Employee Share + Employer Share) * (1 + Administrative Rate)
The total cost over a selected continuation period is:
Total COBRA Cost = Monthly COBRA Cost * Coverage Months
Variables:
- Employee Share is the monthly premium deducted from the employee's pay
- Employer Share is the monthly amount previously paid by the employer
- Administrative Rate is the percentage charged above the full group premium
- Coverage Months is the number of months of continuation coverage
The default administrative rate is 2%, matching the common 102% maximum for standard COBRA continuation, but the field is editable for the actual notice.
COBRA Cost Examples
These examples use a 2% administrative charge and show how losing the employer contribution changes the monthly cost.
| Employee share | Employer share | Estimated COBRA monthly cost | 18-month total |
|---|---|---|---|
| $200 | $600 | $816 | $14,688 |
| $250 | $750 | $1,020 | $18,360 |
| $350 | $900 | $1,275 | $22,950 |
| $500 | $1,200 | $1,734 | $31,212 |
Example Problems
Example 1: Estimate the monthly COBRA premium.
You paid $250 per month and your employer paid $750. The continuation notice charges 2% above the full group premium.
The full premium is $1,000, and the estimated COBRA premium is $1,020 per month.
Example 2: Calculate a subsidy needed.
The monthly COBRA cost is $1,020, but a severance package is intended to keep your cost at $500 for six months.
The required subsidy is $520 per month, or $3,120 over six months.
Frequently Asked Questions
Why is COBRA so much more than my payroll deduction?
The payroll deduction may show only the employee portion. Under COBRA, the participant can be responsible for the employer portion too, plus the permitted administrative charge.
Does every employer have to offer COBRA?
Federal COBRA generally applies to qualifying group plans of employers meeting the applicable size rules. State continuation laws and exceptions can apply, so rely on the election notice for eligibility.
Can I choose only dental or vision COBRA?
Separate benefit components may sometimes be elected independently when they are separate plans. The notice should list each available election and premium.
