If you continue your health insurance benefits through COBRA, your employer will no longer pay for any part of the premiums. Thus, you will be expected to pay the full cost of your coverage. You may also be charged a fee of up to 2 percent of this amount for administrative expenses. You may have to pay for a full year’s coverage in one lump sum, although in some cases you are given the option of paying in monthly installments. COBRA may cost considerably more than you were paying for coverage before termination, but it is probably significantly less than you would pay for comparable individual coverage.
Certain workers who lose their jobs due to trade-related reasons and are eligible for trade adjustment assistance under the Trade Act of 2002 may be eligible for a tax credit equal to 65 percent of the cost of COBRA coverage. Consult a tax professional for additional information.