COBRA Calculator — what continuing your health plan will really cost

A COBRA calculator shows you the real monthly bill you'll face if you elect to continue your former employer's group health plan after leaving a job, rather than the smaller amount you were used to paying as an employee. That's because COBRA requires you to pay both your own share and the portion your employer used to cover, plus a small administrative fee — a combination that often catches people off guard right when they're already dealing with the stress of a job change.

Arb Digital built this calculator, along with a set of other free insurance and benefits tools, to help people see this number clearly before they have to make a fast decision. We're a digital marketing agency, not a benefits administrator or insurance broker, so use this as a planning estimate and confirm your exact premium with your former employer's COBRA administrator.

What This COBRA Calculator Does

You enter what you currently pay each month toward your health plan as an employee, what your employer currently contributes on your behalf, and how many months of COBRA coverage you expect to need. The calculator adds your contribution and your employer's contribution together to find the full group premium, then adds a 2% administrative fee — the maximum COBRA administrators are generally permitted to charge — to arrive at your new monthly COBRA cost. It also shows how much more that is than what you were paying as an employee, and what the total bill looks like over your expected coverage period.

This is a simplified model of a real COBRA premium. Actual amounts depend on your specific plan, your employer's exact contribution structure, and whether your COBRA administrator charges less than the maximum allowed fee. Treat this as a close estimate to use while weighing your options, not a final invoice.

How to Use It

1. Enter your current monthly contribution. This is the amount deducted from your paycheck for health coverage while employed — check a recent pay stub if you're unsure.
2. Enter your employer's monthly contribution. HR or a benefits summary can usually tell you this figure; it's often larger than the employee's own share.
3. Enter how many months of coverage you expect to need. This might be a bridge to a new job's benefits start date, to Medicare eligibility, or to open enrollment on a Marketplace plan.
4. Click Calculate to see your full premium, the added fee, the increase over what you paid as an employee, and your total projected cost.

The Formula Behind the Numbers

Under federal COBRA rules, the group generally may charge up to 102% of the full premium — 100% of the combined employee and employer share, plus a 2% administrative fee. The calculator's formula is: COBRA monthly cost = (your monthly contribution + employer's monthly contribution) × 1.02. The 2% portion is broken out separately as the admin fee, and the increase versus your current cost is simply the new COBRA monthly cost minus what you were paying as an employee. The total over your coverage period multiplies the monthly COBRA cost by the number of months you expect to need. For the official rules governing COBRA continuation coverage, including eligibility and maximum coverage periods, see the U.S. Department of Labor's COBRA page.

Why COBRA Costs So Much More Than Employee Coverage

Most employees only see a fraction of their true health insurance cost on a pay stub, because employers typically cover a significant portion of the premium as a benefit. When you elect COBRA, that employer subsidy disappears — you're now responsible for the full group rate, plus the administrative fee. For many people, this can mean a jump from paying $100–$200 a month to paying $600–$900 a month or more for the exact same plan, simply because the employer is no longer picking up their share. Understanding this jump ahead of time makes it much easier to compare COBRA fairly against other options rather than being surprised by the first bill.

COBRA vs. a Marketplace Plan: What to Compare

COBRA's biggest advantage is continuity — you keep the exact same plan, doctors, and network with no new deductible to satisfy if you've already met part of it this year. Its biggest disadvantage is cost, since you're paying the full premium. A Health Insurance Marketplace plan, on the other hand, may qualify for premium tax credits based on your income after a job loss, which can make it meaningfully cheaper than COBRA even if the plan itself is less comprehensive. Losing job-based coverage typically triggers a special enrollment period for Marketplace plans, so it's worth comparing both options side by side rather than defaulting to COBRA out of convenience.

Factors That Can Change Your Real COBRA Cost

• Plan tier and dependents. Adding a spouse or children to COBRA coverage raises the full premium used in this calculation.
• Employer contribution changes. Some employers negotiate contribution levels annually, which affects the baseline this calculator uses.
• Severance-subsidized COBRA. Some severance packages include employer-paid COBRA premiums for a set period, which would reduce or eliminate your actual out-of-pocket cost during that window.
• State continuation laws. Some states offer "mini-COBRA" programs for smaller employers not subject to federal COBRA, sometimes with different fee structures.
• Length of coverage needed. Federal COBRA is generally available for up to 18 months for most qualifying events, and longer in certain circumstances like disability determinations.

Worked Example: What a $150/$500 Split Actually Costs

Take the calculator's defaults — you were paying $150 a month, your employer was covering $500 a month, and you expect to need six months of bridge coverage. The full group premium is $650. Add the 2% administrative fee of $13, and your new COBRA bill is $663 a month, a $513 jump from what you were used to paying as an employee. Over the six months, that totals $3,978 out of pocket — money that used to be split with your employer and is now entirely yours. Run the same numbers out to the federal maximum of 18 months and the total climbs past $11,900. Seeing that 18-month figure in one place is often what convinces people to seriously shop a Marketplace plan or ask a new employer about an early benefits start date, rather than defaulting to COBRA because it's the path of least resistance right after a layoff.

Qualifying Events and Your Election Timeline

COBRA rights aren't triggered by just any change in employment — they kick in after a specific list of "qualifying events," which include voluntary or involuntary termination of employment (other than for gross misconduct), a reduction in hours that drops you below your plan's eligibility threshold, divorce or legal separation from a covered employee, a covered employee becoming entitled to Medicare, or a dependent child aging out of eligibility under the plan's rules. Once a qualifying event happens, your employer generally has 30 days to notify the plan administrator, and the administrator then has 14 days to send you an official COBRA election notice. From the date of that notice, you typically have 60 days to elect coverage, and if you do elect, the coverage is applied retroactively to the day your original coverage ended, so there's no literal gap in your insurance even if you take the full 60 days to decide. That said, waiting to elect doesn't mean waiting to pay — once you do elect, you'll owe premiums retroactive to your coverage start date, often as a single lump sum for the backdated months.

Common Mistakes to Avoid

• Only budgeting your old employee contribution. COBRA replaces that number entirely with the full premium plus the admin fee.
• Missing the election deadline. COBRA typically must be elected within a limited window after your qualifying event, and coverage can lapse if you miss it, though elections can often be applied retroactively within the deadline.
• Not comparing against Marketplace subsidies. Depending on your post-job-loss income, a subsidized Marketplace plan can be significantly cheaper than COBRA for similar coverage.
• Forgetting dependents change the math. If you're covering a spouse or children, use the full family premium, not just your individual portion.
• Assuming COBRA is indefinite. Federal COBRA coverage periods are time-limited, so plan your next coverage step before it runs out.

Related Free Tools From Arb Digital

If you're navigating a coverage gap, also check out the Health Insurance Calculator to compare Marketplace options, the Deductible vs. Premium Calculator to weigh trade-offs between plans, the HSA Calculator if you have a high-deductible plan available, the Out-of-Pocket Max Calculator to understand your annual coverage limits, and the Dental Insurance Calculator if dental coverage is part of your decision. Browse the full free online tools hub for more.

Frequently Asked Questions

This tool provides general estimates for educational purposes only and is not financial, tax, legal, or medical advice. Figures are illustrative; consult a licensed professional for decisions.