If you lost your job and your employer's health plan was your safety net, you've probably stared at a COBRA letter and felt your stomach drop.
The program lets you stay on your old work plan for up to 18 months, but here's the catch nobody warns you about: you pay the full premium yourself, plus a small administrative fee.
In 2024, the average annual premium for employer-sponsored family coverage hit about $25,600, according to KFF's employer survey.
If your company was covering 70% of that, you were paying around $640 a month.
On COBRA, you'd owe close to the full $2,130.
For a single person, the average total premium ran near $8,950 a year, or about $745 a month.
The 2% administrative fee is the detail that catches people off guard.
Employers can legally charge you up to 102% of the plan's true cost.
On a family plan, that extra 2% alone can add $40 or more to your monthly bill.
Timing matters more than most people realize.
You have 60 days from the date your coverage ends to enroll, and if you miss that window, you're locked out.
But here's the flip side: you can also wait and decide during that period.
If you enroll late, coverage is retroactive to the day you lost your plan, and you'd owe back premiums for those months.
Before you write that first check, price out your alternatives.
A marketplace plan through Healthcare.gov could cost far less, especially if your income dropped after a layoff.
In 2025, enhanced subsidies are still in play for many households, and a family of four earning $60,000 may qualify for significant help.
Medicaid is also worth a look if your state expanded eligibility.
Dental and vision are usually separate on COBRA, and those riders can push your total past $2,500 a month for a family.
If you're relatively healthy and don't have ongoing specialists, a marketplace bronze or silver plan with a higher deductible might beat COBRA on monthly cost, even if the coverage feels thinner.
One more thing: COBRA isn't your only option just because the letter arrived.
A spouse's plan, a part-time job with benefits, or a short-term health plan can all fill the gap.
Short-term plans are cheaper but often skip prescription coverage and pre-existing conditions, so read the fine print carefully.
If you're healthy and between jobs, run the numbers before assuming COBRA is your only path.
For anyone mid-treatment or managing a chronic condition, the continuity of your current doctors and network may be worth the higher bill.
Final Thoughts
Either way, don't let the envelope sit unopened, because the clock is already running.