Paying for COBRA

Employers can require qualified beneficiaries to pay the full premium for COBRA coverage, with no employer contribution, although plans can choose to provide COBRA coverage at reduced or no cost. General payment rules under federal COBRA are outlined below; however, different requirements may apply under the laws of your state.

COBRA Payments - 102% of Premium

In general, the premium an employer charges qualified beneficiaries cannot exceed the full cost of the coverage, plus a 2% administration charge. For example, if the monthly premium for the qualified beneficiary was $1,000 per month, the employer may charge as much as $1,020 per month for COBRA coverage.

COBRA Payments for Disability - 150% of Premium

For qualified beneficiaries receiving the 11-month disability extension of COBRA coverage, the premium for those additional months may be 150% of the plan’s total cost of coverage.