What Is COBRA?
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that lets you continue your employer-sponsored health insurance after you leave a job, lose coverage, or experience another qualifying event โ for up to 18 months.
The catch: you pay the full cost of the premium โ what you were paying plus what your employer was paying โ plus a 2% administrative fee.
โ ๏ธ COBRA is expensive. The average employer pays over 70% of your health insurance premium. On COBRA, you pay all of it. A plan that cost you $150/month at work might cost $600โ800/month on COBRA.
Who Qualifies for COBRA?
- You lost your job (voluntary or involuntary, except for gross misconduct)
- Your hours were reduced below the threshold for employer coverage
- You got divorced and lost coverage through your spouse's plan
- You turned 26 and aged off a parent's plan
- An employee covered by employer insurance died
How Long Does COBRA Last?
- 18 months โ job loss or reduced hours
- 36 months โ divorce, death of employee, or dependent aging off plan
- 29 months โ if you're disabled at the time of job loss
COBRA vs ACA Marketplace โ Which Is Better?
In most cases, checking the ACA Marketplace is worth it before choosing COBRA. If your income qualifies for subsidies, a Marketplace plan may cost significantly less with equivalent or better coverage.
- COBRA advantage: Same plan, same doctors, same network โ no disruption
- Marketplace advantage: Often much cheaper, especially with subsidies
The 60-Day Decision Window
You have 60 days from losing coverage to elect COBRA. You also have 60 days to enroll in a Marketplace plan after a qualifying life event. Don't let both windows expire without choosing one.
Check Your ACA Subsidy First
See if you qualify for ACA subsidies before paying full COBRA premiums.
Check Your ACA Subsidy First โ