stethoscope coiled like a cobra snake

Why is COBRA insurance so much money?

It seems that the general public has absolutely no understanding of what COBRA insurance is and why it costs so much.  You can read the “official” information outlining COBRA by visiting this link:

http://www.dol.gov/dol/topic/health-plans/cobra.htm

In “layman’s language”, COBRA is an extension of the insurance that a person had while they were employed.  The employee has group insurance through their employer. Typically, employers pass on some of the insurance premium to the employee while they are employed.  Historically, the vast majority of employers that provided insurance to their employees offset some of the premium as a benefit of employment, so the employee never actually realized the actual premium amount for the insurance coverage that he enjoyed.

Upon separation of employment, an employee is extended COBRA Continuation of Coverage; however, the employer passes the entire cost of the health insurance premium to the employee.  At the very most, the employer (or insurance company handling the COBRA requirements for the employer) can charge a 2% administration fee.

The fact is that health insurance premiums are very expensive.  If an employee only paid a nominal amount for their health benefits while they were employed, that just means that their employer paid a greater portion of the premium.  It’s unfortunate that the vast majority of employees don’t understand this concept, even after they receive their COBRA paperwork stating the total amount due for their health insurance.  Typically, people complain about the cost of COBRA as if they are being offered a completely different insurance that costs more than what they had.

No, folks, you are still enrolled in the very same health plan that you had while you were employed, but now you are responsible for the full premium and not your employer!

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