Who Pays for COBRA Insurance: Unveiling the Truth

In the United States, health insurance is a vital necessity, especially in times of sickness and healthcare needs. When an individual’s employment ends, they can still continue their employer-based health coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA) insurance. In this article, we’ll explore the truth behind the question, “Who pays for COBRA insurance?”

What Is COBRA Insurance?

COBRA insurance is a federal law that enables people to keep their employer-provided health insurance coverage for a limited amount of time after they leave their job or experience a qualifying event that would otherwise result in a loss of coverage.

COBRA applies to firms with at least 20 employees and requires employers to notify their workers of their right to stay on their group health plan for an extended period if they have job loss or other qualifying event. The period is typically up to 18 months for most events, but it can be extended in some circumstances.

Who Pays for COBRA Insurance Premiums?

The answer to this question may vary depending on the situation, but in most cases, it is the responsibility of the individual enrolled in COBRA insurance to pay for their premiums. Companies are not required to subsidize COBRA premiums.

Two circumstances will influence the payment for COBRA insurance:

1. COBRA During Employment

If a person is still employed but has had their hours decreased to the point of losing coverage or has other qualifying events like divorce or dependent aging out of coverage, the person is typically responsible for the entire COBRA premium.

Furthermore, the amount will usually include a 2% administration fee, which ensures that the premium covers the entire cost of the insurance for the period. The amount may vary depending on the employer’s cost-sharing arrangement and the person’s insurance plans.

2. COBRA After Employment

If a person experiences a qualifying event that results in unemployment, the person can continue group health coverage as long as they pay the full premium, including the employer’s and employee’s share, plus a 2% administration fee.

The amount of the COBRA premium can come as a surprise to many since it represents an out-of-pocket expense that they hadn’t faced before. However, the premiums for COBRA are usually higher than other health insurance coverage.

Alternatives to COBRA Insurance

Individuals who lose their employment and health coverage through their jobs have several options to consider, including:

  • Enrolling in a family member’s health insurance policy that includes the individual’s coverage;
  • Applying for health insurance through the Health Insurance Marketplace;
  • Seeking coverage through Medicaid for low-income households;
  • Exploring individual private health insurance options.

The most attractive option varies depending on the individual’s circumstances, financial resources, and healthcare needs.


COBRA insurance can be a helpful alternative to individuals between jobs, but it comes at a considerable cost that may not be feasible for some individuals. Paying for COBRA insurance premiums is the responsibility of the person enrolled, and companies are not required to subsidize the insurance premiums. It is essential to explore alternative options and compare the costs of COBRA to other health insurance alternatives, including private insurance and state-sponsored plans.


Q. What is a qualifying event?

A. Qualifying events cover several situations ranging from losing a job or reduced hours to divorce, death, or a minor child reaching the age when they no longer qualify for dependent insurance coverage under their parents.

Q. Can I get COBRA coverage if I quit my job?

A. No, quitting your job is not a qualifying event for COBRA insurance.

Q. How long can I keep COBRA coverage?

A. The period of coverage typically lasts up to 18 months but can extend up to 36 months under specific circumstances, such as disability or death.

Q. How much does COBRA coverage cost?

A. The amount of COBRA coverage cost varies depending on the person’s insurance coverage and the employer’s insurance plan. However, it can be up to 102% of the premium cost due to administrative fees.

Q. Should I consider COBRA coverage?

A. It depends on various factors, including financial resources, healthcare needs, and alternative options available. It is essential to weigh the costs and benefits of COBRA coverage and alternative health insurance options.


  • “Continuation Of Health Coverage (COBRA).” U.S. Department Of Labor, 2021, www.dol.gov/general/topic/health-plans/cobra.
  • Healthcare.gov, 2021, www.healthcare.gov/unemployed/coverage/.
  • “COBRA.” Wikipedia, 2021, en.wikipedia.org/wiki/COBRA_(health_insurance).

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