COBRA continuation health coverage gives eligible former employees the opportunity to continue being covered under their former employer's group health care plan. Premiums will be significantly higher for the former employee because they will be paying for both their share and the business' share of the premium, plus an administrative fee. Although the premium for COBRA can be costly, it is likely to be a lot less than if the insured purchased a health insurance policy on the open market.
Enter the amount of the employee's portion of the premium into the calculator. For example, if the employee's portion of the premium was $100, enter "100" into the calculator.
Add the employer's portion of the premium into the calculator to get the total premium. For example, if the employer's portion was $200 then $100 + $200 = $300.
Add the plan administrative fee of two percent. In the above example, $300 x 0.02 = $6, so the total premium would be $300 + $6 = $306. This is how much to charge the employee for COBRA payments.
The plan administration fee is optional. You may choose to charge a reduced fee or none at all. If a former employee is taking the 11-month disability extension, he can be charged up to 150 percent of the premium, including the administrative fee. In the above example, 150 percent of $300 is $450.
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