Cobra cost

[scrabbler1]

Don't forget that if you work one day into April, for example, you are covered for the whole month. So your cobra payments wouldn't start until May. As you plan your final day, make sure it is just after the start of a month not at the end.

Good reminder. This happened with me and it was a pleasant surprise. When I reduced my weekly hours worked from 20 to 12 and lost eligibility for group health coverage, I went on COBRA. But because my last day of work fell on Friday, June 1, 2007, I remained covered by my group health for the entire month of June (including the 50% employer subsidy) and didn't begin COBRA until July.

 

[Scuba]

The comments about the cost being over $1000 per month for a couple are right on. I'd guess about $15K to $20K per year for a couple.

My cost was almost $1,400/month just for me. Well over $20K/Year if I also covered DH.

 

[big-papa]

Last time for me (2014), it was going to be around $2K for our family of 3. It really depends on the rates negotiated by your employer with the particular insurance company they use. And, yes, typically tack on 2% in administrative fees to that.

 

[bingybear]

Last time for me (2014), it was going to be around $2K for our family of 3. It really depends on the rates negotiated by your employer with the particular insurance company they use. And, yes, typically tack on 2% in administrative fees to that.

This really depends on many things. What the plan is (what it covers), deductible, MOOP, network, size of employer, location, and demographics of the employees in the company. I worked for a company mostly composed of young healthy people... rates were quite affordable both at the company and when I left and took time off. The company was set up so cost for insurance was not age rated... Cobra was age rated either.

 

[ChiliPepr]

Anyone know how I can find out the monthly cost for Cobra insurance through my employer? I'm planning to resign soon and afraid if I ask the Human Resources department they will suspect I'm leaving.

Since it is tax time, I have received a form from my employer that stated I had insurance and also stated the monthly cost for that insurance. They were paying $1,268/month for myself and my SO. COBRA should be 102% of that.

I have already passed the form on to my tax accountant so cannot grab you the name, sorry.

 

[pb4uski]

One would also need to consider what the employee pays for coverage in addition to what the employer pays and the 2% administrative fee.

 

[ChiliPepr]

One would also need to consider what the employee pays for coverage in addition to what the employer pays and the 2% administrative fee.

True. I do not pay anything toward insurance (except the Tax on my SO's part), so mine is the full cost.

 

[Johnora]

Just started COBRA

I just started COBRA this month for the next 18 months and as a single it runs at $502 per month including dental and vision. To be added to my DW insurance was over $700 per month, so in my case COBRA was far cheaper.

Our HR department was the only avenue to give me accurate numbers to work with. Mine is a HDHP as well which kept costs down further.

Of note COBRA is competitive for a single, but it gets very expensive quickly when you add additional people like any kids or spouse. Marketplace could be cheaper then.

 

[fh2000]

I just got this from our HR. The one with my current group plan will be $1450/month for me and spouse. If I add our 2 adult children (one in college, one ready for graduate school), total will be close to $2000/month.

 

[oscar1]

I wanted to know my Cobra rates too as I am getting close to throwing in the towel. Was concerned about word getting back to our small company leadership but I called our Medical provider and told them I needed complete confidentiality and asked what my Cobra rates would be. It was $1,100 a month for wife, daughter and I for both Medical and a Dental. I did not trust HR so I went to the provider for the info. Most understand HIPAA confidential matters in the HR world.

 

[Montecfo]

You need to find out what your company's total premiums are. I read somewhere recently that the average corporate policy covers about 70% of premiums. If so the typical COBRA policy would cost more than 3 times the employee rate.

The employee portion varies dramatically. At our company we pay 95% of the cost. The total cost is provided at open enrollment as part of the benefit materials, so it is there for all to see. In fact we like letting people know how much we pay for them.

At our company, and at my wife's employer (they also publish), monthly cost for a couple or a family is in the $1400-1600 range.

Yes, if you ask the cost outside of open enrollment, HR will know you are contemplating leaving.

 

[eastnortheast]

Okay - still a bit confused on whether the W-2 amount is total (employee + employer) or just employer contribution.

MBSC (post #19) indicates it is total cost. However, others (e.g. jonat) seem to indicate it is just company contribution.

However, the IRS link provided my MBSC seems pretty clear. I just want to make sure as I think about moving into RE and want to know COBRA costs for the first 18 months of retirement.

Thanks!

 

[Bir48die]

Perhaps your a call to your health insurance provider can tell you. Be prepared, it'll be far more expensive than you're paying now. Mine is about $580/mo for a single (my share was well under a hundred while employed). yikes!

btw if you resign, are you still eligible for COBRA?

I think there's some confusion from this. Your share of your healthcare was $100, not how much the company paid for each employee's plan. I'm on Cobra now and it's just over $500 per month. If I was still working that is what my employer would be paying for me.

 

[bingybear]

Okay - still a bit confused on whether the W-2 amount is total (employee + employer) or just employer contribution.

MBSC (post #19) indicates it is total cost. However, others (e.g. jonat) seem to indicate it is just company contribution.

However, the IRS link provided my MBSC seems pretty clear. I just want to make sure as I think about moving into RE and want to know COBRA costs for the first 18 months of retirement.

Thanks!

Lets straighten one thing out. Your initial cobra cost will last typically until year end. Just like when you are working, the plans usually change at the beginning of the new year. Prices and plans can and usually will change. At least the pricing. Short comment - don't expect cobra to hold the same plans and prices for 18 months.

I can't comment of the W-2 data. I don't remember.

But then... I asked HR about the cobra cost with the CEO and CTO in the same meeting... and I was just a normal engineer.

 

[SomedaySoon]

When I was laid off in early 2013 I went onto Cobra coverage to continue Health Insurance for myself and DW for the rest of that year. It was $1359 a month. That was painful.

 

[2017ish]

When I was laid off in early 2013 I went onto Cobra coverage to continue Health Insurance for myself and DW for the rest of that year. It was $1359 a month. That was painful.

Yep, that wasn't pretty in 2013. But, I would rejoice if we could pay that in 2018. I know we won't for the end of 2017. 4 more years, different jurisdiction, and the employer is under 150 employees with some bad claims history....

Still glad to be setting ourselves up for it though. As long as the former-employer offers spouse coverage in 2018, we'll be guaranteed some health insurance next year no matter what happens to individual policies in our area.

 

[scrabbler1]

Let me attach come numbers to my earlier post about when I first switched to COBRA from my employer's group health plan.


For the first 6 months of 2007, I was paying $83.66 per biweekly paycheck, or 50% of the total premiums. My employer was paying the same amount, $83.66 per biweekly paycheck. Had I been working full-time, I would have been paying 25% of the premiums, or $41.83, while my employer would have been paying 75% of it, or $141.49.


When I switched to COBRA midyear, I became responsible for the entire premium. That premium per paycheck was $167.32. Convert that to a monthly premium makes it $362.53 ($167.32 x 26 / 12). Then add the 2% admin fee to get $369.78. That's what I paid per month for the rest of 2007.


In 2008, my employer got hit with a 6% increase, so my COBRA rate rose 6%, too, to $391.97. That's what I paid per month in 2008 until COBRA expired at the end of the year.


Another significant difference between paying COBRA versus being on my employer's plan was that I had to pay my COBRA premiums with after-tax dollars, not pretax dollars through payroll deduction. I went from paying half with pretax and the other half tax-free to paying all of it using after-tax dollars. My income was too high to be able to deduct my COBRA premiums (and the cutoff was only 7.5% of AGI back then).


Still, COBRA was a good deal for me. When I left COBRA at the end of 2008, I had to buy my own HI policy in 2009. I paid well over $400 per month (no dental) and those rates rose 50% in the next 2 years to nearly $700 per month. I ditched the policy and was underinsured for 2 1/2 years before the ACA exchanges arrived to rescue me.


I'd have gladly stayed on COBRA much longer than 18 months.

 

[Hyperborea]

Another significant difference between paying COBRA versus being on my employer's plan was that I had to pay my COBRA premiums with after-tax dollars, not pretax dollars through payroll deduction. I went from paying half with pretax and the other half tax-free to paying all of it using after-tax dollars. My income was too high to be able to deduct my COBRA premiums (and the cutoff was only 7.5% of AGI back then).

One option that may not make sense for everybody is to use HSA accounts to make the COBRA payments. You can only use an HSA for payments under two circumstances - for COBRA or if you are on unemployment insurance. I have an existing HSA balance and I can make contributions this year so I have enough to cover the COBRA for this year.

Since I plan to leave the US this time next year (before COBRA ends) and then live elsewhere I won't be under the US health care system again. Spending down my HSA balance makes sense. It may also make sense for other retirees that plan to relocate outside the US.

 

[ImReady]

Okay - still a bit confused on whether the W-2 amount is total (employee + employer) or just employer contribution.

MBSC (post #19) indicates it is total cost. However, others (e.g. jonat) seem to indicate it is just company contribution.

However, the IRS link provided my MBSC seems pretty clear. I just want to make sure as I think about moving into RE and want to know COBRA costs for the first 18 months of retirement.

Thanks!

Yes, also a little confused based on the replies. Everything I can find online including the IRS site indicates that Section 12DD on your W2 is for the employee and employer contribution combined. From TurboTax FAQ: Box 12 amounts with the code DD signify the total cost of what you and your employer paid for your employer-sponsored health coverage plan

 

[jonat]

Here are my former employer's 2017 national plan COBRA premiums:

If I compare my W-2 item DD (cost of employer-sponsored health care) it comes pretty close to 12 times the monthly value shown here (which is a bit higher than the 2016 prices), but as I was on the Anthem HDHP I paid zero premiums while an employee.

 

[NoOneGetsIt]

I left my job and COBRA would have been available if I left on my own or was termed. When I left it was $987 for the two of us if we wanted it. I waited the 2 months and signed up for ACA. What I got is 2 months of no cost [you can always sign up any time during the 60 days after you leave and it is retro if you need it] and ACA was FAR cheaper [as long as you stay UNDER $64,080 per year income on MAGI. If you go over in my state you're gunna pay full price which is $12k....under $64,080 and the price is anywhere from $60/year to $2800 / year.

Keep in mind if you sign up for COBRA you have to keep it to the end of the year.

 

[timerfirst]

I just asked HR yesterday. I said I'm planning my retirement for next year (just a little white lie). It will cost me $960 + $59 dental + $8 vision (I'm single with HSA). The nice HR lady mentioned I can take all or any part of the coverage. Coverage is for 18 months. I'm covered by the employer through the end of the month, so I plan to retire on the 1st.

 

[NoOneGetsIt]

Smart move to wait until the first of the month if they cover you to EOM. My employer changed to "immediate" upon leaving -oiy
If you make under $47,520 this year (single) you can get substantial tax credits that will make your health insurance very affordable...I would look into holding onto the cobra paperwork (you can sign up retro if you need it) and 2 weeks before the 60 day window is up sign up for ACA...that way you don't have lapse coverage and save 2 months of payments.

 

[bingybear]

Smart move to wait until the first of the month if they cover you to EOM. My employer changed to "immediate" upon leaving -oiy
If you make under $47,520 this year (single) you can get substantial tax credits that will make your health insurance very affordable...I would look into holding onto the cobra paperwork (you can sign up retro if you need it) and 2 weeks before the 60 day window is up sign up for ACA...that way you don't have lapse coverage and save 2 months of payments.

I would be careful following this advice blindly.
First check the coverage and network of the plans. When I RE my cobra was notably less expensive than non-subsidized ACA but a fare bit more than subsidized ACA. Cobra's coverage was better in network, deductible and max out of pocket. Just saying that I would choose the best overall plan, not just saving premiums. Also if you wait to the last minute, make sure you have a plan to make your election if you are unable to. YMMV

 

[broadway]

I would look into holding onto the cobra paperwork (you can sign up retro if you need it) and 2 weeks before the 60 day window is up sign up for ACA...that way you don't have lapse coverage and save 2 months of payments.

Just know that those two months, you will be without a valid insurance ID.
You will show up as not be covered by insurance if the hospital or doctor's office checks on your coverage.
If something happens, you will pay out-of-pocket first then get reimbursed by the insurance company.
This happens even when you elect COBRA.