The Consolidated Omnibus Budget Reconciliation Act (COBRA) ensures that when employees leave a company, they must be given the option to continue coverage under your company's group health insurance plan. That doesn't mean that your company has to foot the bill for the employer part of the premium: that responsibility falls to the former employee. In addition, you are allowed by law to charge a small administration fee to handle a former employee's health insurance plan.
Enter the amount of the employee's contribution into the calculator. For example, if the employee's premium was $200, enter "200."
Add the amount of the employer contribution. For example, if the employer contribution is $400, enter "+" and then "400."
Press "Total" or "=" to get the total amount of the premium. In the above example, the premium would be $600.
Multiply the amount you calculated by 102 percent to account for the 2 percent you can add for the administrative fee. For example, $600 x 1.02 = $612. This is the total premium you should charge to the former employee.