Losing your job means losing your employer-subsidized health coverage at the end of the month (or the day, depending on your plan). COBRA is the federal law that lets you keep the exact same plan — but you pay the entire premium yourself, plus a small administrative fee. The price shock is usually significant.
The core trade-off
Same plan, full price. Your employer was likely paying 70–80% of the premium while you worked there. On COBRA, you pay 100% plus up to 2% admin — often $600–$2,000 per month for an individual, more for family coverage. You keep the same network, the same deductible progress for the year, and the same prescription coverage.
Election window: You generally have 60 days from the loss of coverage (or the date you receive the COBRA notice) to elect coverage, and you can elect retroactively. This means you can wait and see if you need it.
When COBRA wins
- You're mid-treatment, mid-prescription course, or mid-pregnancy and continuity matters.
- You've already met a significant chunk of your deductible for the year and switching plans would reset the clock.
- You expect to be re-employed with new coverage within 1–3 months.
- Your COBRA cost is comparable to or cheaper than marketplace alternatives (rare, but possible for very rich employer plans).
When the ACA marketplace wins
- A layoff is a qualifying life event that opens a Special Enrollment Period on the marketplace — you don't have to wait for open enrollment.
- Marketplace subsidies are based on expected annual income, and if you've just been laid off, your income for the year may now qualify you for substantial premium tax credits.
- You're flexible on network and want to keep monthly costs predictable.
The "wait and see" strategy
Because you have 60 days to elect COBRA retroactively, many people use this window. If you don't have a medical event, you skip COBRA and enroll in marketplace coverage. If you do have a medical event in those 60 days, you elect COBRA retroactively and it covers the bills.
This requires careful timing on premiums — read the COBRA election notice closely.
What to ask HR or the COBRA administrator
- What is the exact monthly premium for COBRA continuation of my current plan?
- When does my current coverage end?
- When will I receive the COBRA election notice, and what is my election deadline?
- Are there any subsidies (federal or state) available to me?
The Department of Labor maintains the official COBRA overview — DOL COBRA continuation coverage (affiliate link — OffbookHR may earn a commission if you buy through this link. It does not affect ranking.). The federal marketplace handles enrollment for ACA plans — HealthCare.gov coverage after job loss (affiliate link — OffbookHR may earn a commission if you buy through this link. It does not affect ranking.).
This page reflects general information and is not insurance or legal advice. Consult a licensed benefits advisor or your former employer's HR team for guidance specific to your situation.