Tip # 700 (!) - WHAT DOES 'COBRA' COST?

That was the question caller ‘Rob’ asked earlier this week.

First, what is COBRA?

Buried in the massive Consolidated Omnibus Budget Reconciliation Act of 1985 is a provision allowing individuals to continue their employer sponsored health insurance (at their own cost plus an admin fee) in the event of certain “qualifying events.” 

That simple ‘right’ became known as COBRA because apparently the laws’ hundreds of other provisions were just a tad less memorable; e.g., COBRA also reduced “the amount of Flue-Cured and Burley tobacco that may be marketed without penalty from 110 to 103 percent of the farm marketing quota.”

Heart, be still.

Anyhoo, if Rob worked for one of my clients, I’d just look it up. Otherwise, it’s hard to guess.

Larger employers would charge 103% of the billed premium; i.e., the tiered composite rates for Single, Limited Family, Family, etc.

Smaller employers are often billed age rated premiums for each family member; e.g. age 31 $573/mo., age 62, $1,422. 

Premiums also vary by SIC, insurance rating areas, Et al. 

In other words Rob, I have no freakin’ clue and this is a really busy time for us. Did you call HR?

(Maybe I should retire!)

HAPPY THANKSGIVING.