COBRA Health Insurance After a Job Loss: Costs and Other Options
Did you just lose your job, retire early, or leave work to start your own business? One of the first questions you may have is what to do about health insurance.
COBRA may let you keep the health plan you already have, but you may suddenly be responsible for most or all of the premium yourself. We can help you compare COBRA with other available options before you decide.
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What Is COBRA Health Insurance?
COBRA is a federal law that can allow you and eligible family members to temporarily continue the group health coverage you had through an employer after certain qualifying events.
In many cases, the coverage itself stays the same. You may be able to keep the same provider network, benefits, deductibles, and prescription coverage.
The biggest difference is usually the cost. Instead of your employer paying part of the premium, you may become responsible for the full cost yourself.
Who May Qualify for COBRA?
- You leave or lose your job for a reason other than gross misconduct
- Your work hours are reduced and you lose eligibility for coverage
- You retire and lose active employee health coverage
- A spouse loses coverage because of divorce or legal separation
- A family loses coverage because the covered employee dies
- A child loses dependent eligibility under the group plan
Your COBRA election notice or plan administrator can confirm exactly which continuation rules apply to your coverage.
Why Can COBRA Feel So Expensive?
While you're working, your employer may be paying a large part of your health insurance premium. That employer contribution isn't always obvious because you usually only see your share coming out of your paycheck.
After leaving the job, COBRA can require you to pay both your old employee share and the portion your employer was previously paying.
A Simple Example
Imagine the total cost of your employer health plan is $800 per month. While you were working, perhaps $200 came out of your paycheck and your employer paid $600.
If you continue that coverage through COBRA, you could become responsible for essentially the entire premium rather than only the $200 you were used to paying.
Your actual COBRA election notice will tell you exactly what your monthly premium will be.
How Long Can COBRA Last?
Job Loss or Reduced Hours
Federal COBRA continuation is generally available for up to 18 months following termination of employment or a reduction in hours.
Disability Extension
Certain qualified beneficiaries who meet federal disability requirements may qualify for an extension of up to 11 additional months, for a possible total of 29 months.
Certain Family Qualifying Events
Certain qualifying events affecting spouses or dependents can result in continuation coverage lasting up to 36 months.
State Continuation
State continuation laws can work differently from federal COBRA. Eligibility and duration depend on the state and the type of employer health plan.
Important COBRA Deadlines
COBRA gives you time to make a decision, but there are several deadlines you don't want to miss.
COBRA Election
For federal COBRA, you generally have at least 60 days to elect continuation coverage. The period generally runs from the later of the date your coverage ends or the date your COBRA election notice is provided.
First Payment
After electing federal COBRA, you generally have at least 45 days to make your initial premium payment.
Monthly Payments
After your initial payment, federal COBRA plans must generally provide at least a 30-day grace period for ongoing premium payments.
Marketplace Enrollment
Losing qualifying job-based coverage generally creates a Marketplace Special Enrollment Period. You may be able to select Marketplace coverage before or shortly after the employer coverage ends.
What Can You Compare With COBRA?
COBRA isn't automatically good or bad. The goal is to compare it with the other coverage available to you before making a decision.
Marketplace Health Plans
Losing job-based health coverage can create a Special Enrollment Period for Marketplace coverage.
Marketplace plans cover pre-existing conditions, and depending on your projected household income and eligibility, you may qualify for premium assistance.
Provider networks and benefits may differ from your former employer plan, so it's important to check your doctors, hospitals, and prescriptions.
Private Health Plans
Depending on where you live and your eligibility, private coverage outside the Marketplace may also be available.
Some private plans may offer PPO-style networks or different pricing structures. Some also use medical underwriting.
Benefits, exclusions, underwriting, and pre-existing-condition rules can differ significantly from ACA major medical coverage, so we'll explain those differences before you apply.
Short-Term Coverage
If you're only between employer plans for a short period, short-term coverage may be worth considering where available.
Short-term plans can have more limited benefits and may exclude pre-existing conditions. Availability and rules also vary by state.
A Spouse's Employer Plan
Losing your own employer coverage may allow you to join an eligible spouse's employer-sponsored health plan through special enrollment.
If that's available, it should be included when you compare your choices.
When COBRA May Make Sense
COBRA can be expensive, but there are situations where keeping the exact same coverage may be valuable.
You're in Ongoing Treatment
If you're seeing specialists, undergoing treatment, or have surgery scheduled, keeping the same network and benefits may simplify your care.
You've Already Met Your Deductible
Moving to a new health plan can mean starting a new deductible and out-of-pocket structure. COBRA may allow you to continue under the same plan year.
Your Prescriptions Are Well Covered
If you take expensive medications, changing plans could mean a different formulary, pharmacy network, or approval process.
You Only Need a Short Bridge
If another employer plan will begin soon, keeping your existing coverage temporarily may be worth comparing with switching plans.
Common COBRA Mistakes to Avoid
Automatically Taking COBRA
COBRA may be the first option presented to you, but that doesn't mean it's the only option. Compare alternatives before deciding.
Only Comparing Monthly Premiums
Look at deductibles, provider networks, prescriptions, out-of-pocket costs, and benefits too.
Missing a Payment Deadline
COBRA plans can terminate continuation coverage if required premiums aren't paid within the applicable payment and grace periods.
Dropping COBRA Too Early
Voluntarily cancelling COBRA usually doesn't create a new Marketplace Special Enrollment Period. Make sure replacement coverage is properly lined up first.
How to Compare Health Insurance After Leaving a Job
Compare Total Cost
Look beyond the monthly premium. Compare deductibles, copays, coinsurance, prescription costs, and maximum out-of-pocket exposure.
Check Your Healthcare Needs
Consider doctors, hospitals, prescriptions, upcoming procedures, and anyone in your family receiving ongoing care.
Look at Your Timeline
Think about how long you'll need coverage and whether you expect another employer plan, Medicare, or another coverage option soon.
COBRA vs. Other Health Insurance Options
| Option | Cost | Health Screening | Pre-Existing Conditions | May Be Best For |
|---|---|---|---|---|
| COBRA | You may pay up to the full plan cost plus an administrative fee | No new medical underwriting | Same coverage rules as your existing group plan | Keeping the same plan, doctors, benefits, or ongoing treatment |
| Marketplace Plan | Varies by age, location, plan, household income and eligibility | No medical underwriting | Covered | People wanting ACA major medical coverage or who may qualify for Marketplace financial assistance |
| Private Plan | Varies by plan and, for some plans, medical underwriting | May apply | Rules vary by plan | Eligible people comparing non-Marketplace coverage and different provider-network options |
| Short-Term Plan | Varies | May apply | May not be covered | Certain temporary coverage gaps where available |
| Spouse's Employer Plan | Depends on employer contribution | Generally no medical underwriting | Depends on the employer plan | People eligible for coverage through a spouse's employer |
Availability, eligibility, benefits, underwriting, and costs vary by state and plan. This chart is a general comparison and does not replace the specific plan documents.
Get Free Help Comparing Your Options
Leaving a job already comes with enough decisions. You don't need to become a health insurance expert at the same time.
What We'll Look at With You
- Your actual COBRA premium
- Who in your family needs coverage
- Your doctors and hospitals
- Important prescription medications
- Your deductible and how much you've already paid this year
- Available Marketplace options
- Available private coverage options
- How long you expect to need the coverage
What Our Clients Say
Changing health insurance can feel overwhelming. Our goal is to make the options easier to understand so you can make a confident decision.
“I needed insurance when I started my business and left my 9 to 5 job.”
“Luis did a phenomenal job at setting me up with an affordable plan.”
— Rhonda B.
“Luis is very patient on walking me thru to understand all the details of the medical plan that I was signing up.”
“He was very professional the entire time, and I genuinely felt he was there to help, and not just a salesman.”
“His plan definitely saved me a lot money, and I’m a happy client. Highly recommended!”
— Paolo C.
“Researching and signing up for a new insurance plan can be a daunting task that usually ends in more questions and a headache.”
“Luis took all of stress out of finding a new plan! Luis asked me a few questions about my preferences and set me up with a quality, affordable plan that fit my needs.”
— Tyler L.
“He made health insurance easy to understand by taking his time to explain and answer any questions I had.”
“Even after purchasing insurance, he was still very quick to respond with any other questions and check up on us.”
“Easy to tell he genuinely likes his job and helping people navigate what can be a complex decision.”
— Daniel L.
Common Questions About COBRA Health Insurance
Is COBRA the same insurance I had while I was working?
Generally, COBRA continues the same group health coverage you had before the qualifying event. That can mean keeping the same provider network, benefits, deductibles, and plan rules, subject to changes the employer makes to the plan for similarly situated active employees.
How much can COBRA cost?
Under federal COBRA, qualified beneficiaries can generally be required to pay up to 102% of the total cost of coverage.
That total includes both the amount you previously paid and the portion your employer may have been paying for you.
How long do I have to decide whether to take COBRA?
Federal COBRA generally gives you at least a 60-day election period, measured from the later of the date your coverage ends or the date the election notice is provided.
Do I have to pay for COBRA immediately when I elect it?
Federal COBRA generally gives you at least 45 days after electing coverage to make your initial premium payment.
Because COBRA coverage can apply retroactively to the date your prior coverage ended, that first payment may include more than one month's premium.
What happens if I pay COBRA late?
After the initial payment, federal COBRA generally requires at least a 30-day grace period for ongoing premiums.
Coverage can be terminated if the required premium isn't paid by the end of the applicable grace period.
Can my spouse and children take COBRA?
Eligible spouses and dependent children may have their own rights to continuation coverage after qualifying events. In some cases, they may elect COBRA even if the former employee does not.
Can I cancel COBRA if I find something else?
You can generally end COBRA coverage, but be careful about timing. Voluntarily ending COBRA early usually does not, by itself, create a Marketplace Special Enrollment Period.
Make sure your replacement coverage is approved and has an effective date before voluntarily dropping your existing coverage.
Can I get Marketplace insurance instead of COBRA?
Losing qualifying employer-sponsored health coverage generally creates a Marketplace Special Enrollment Period.
Depending on your household income and other eligibility factors, you may also qualify for Marketplace financial assistance.
What if I already met my deductible?
This is an important factor to consider. Moving to a different health plan can mean starting under a new deductible and out-of-pocket structure.
If you've already paid a substantial amount toward your existing deductible or out-of-pocket maximum, COBRA may be worth comparing carefully before switching.
Is COBRA always more expensive than another plan?
No. COBRA often feels expensive because you're paying the full premium, but whether another option costs less depends on your age, location, household, income, health needs, eligibility, provider network, and available plans.
The best comparison looks at both monthly premiums and what you could actually spend when using the coverage.
Is the consultation really free?
Yes. There is no charge for the consultation and no obligation to enroll in a plan.
Before You Choose COBRA, Compare Your Options
You may only have a limited window to make your decision. We'll help you compare COBRA with the other coverage available to you so you understand the costs, networks, benefits, and tradeoffs before you choose.
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