COBRA Trap Explained
Why sticking with COBRA could cost you thousands of dollars, and how to avoid the most common mistakes when transitioning between jobs.
What is the COBRA Trap?
When you leave a job, COBRA allows you to keep your employer-sponsored health plan. It sounds safe and familiar, which is exactly why so many people fall for it.
The "trap" is the cost. While you were employed, your employer likely paid 70% to 80% of your premium. On COBRA, you pay 100% of the premium plus a 2% administration fee. This sudden shock to your monthly budget often drains savings during a time when you need them most.
The Cost Reality
4 Reasons to Think Twice About COBRA
Unsustainable Premiums
Paying 102% of your health insurance premium without an employer subsidy is often the largest unexpected expense people face when transitioning jobs.
It's Only Temporary
COBRA typically only lasts 18 months. You are paying a premium price for a temporary bandage rather than securing a long-term solution.
Retroactive Payments
If you wait to elect COBRA until the end of your 60-day window, you have to pay the premiums for the months that already passed, resulting in a massive lump-sum bill.
The False Security
Many stick with COBRA just to keep their doctors, not realizing that many ACA Marketplace plans offer the exact same networks for a fraction of the cost.
Not sure if COBRA is right for you?
Don't get locked into high premiums without knowing your alternatives. Let our licensed experts provide a free, side-by-side cost comparison.
Escape the Trap
Don't lock yourself into an overpriced plan. Let our licensed advisors compare your COBRA costs against ACA Marketplace and Short-Term options. Our service is 100% free.
- Save hundreds per month
- Keep your preferred doctors
- Unbiased, independent advice