Health insurance can become an immediate financial decision when employment changes. COBRA is valuable because it can preserve an existing provider network and plan design, but it is not automatically the cheapest option.
The U.S. Department of Labor (DOL) states that COBRA generally applies to private-sector group health plans sponsored by employers with at least 20 employees on more than half of their typical business days in the prior calendar year. Different rules can apply to smaller employers through state continuation laws.
What events can trigger COBRA?
Qualifying events can include termination of employment for reasons other than gross misconduct, reduction in hours, divorce or legal separation, death of the covered employee, or a dependent child losing dependent status. Which family members qualify and for how long depends on the event.
How long do you have to elect COBRA?
DOL guidance explains that qualified beneficiaries generally receive at least 60 days to elect COBRA, measured from the later of the loss of coverage or the date the election notice is provided. This window is important because waiting too long can eliminate the option.
How long can COBRA last?
| Situation | Typical federal maximum | Important note |
|---|---|---|
| Job loss or reduction in hours | Usually up to 18 months | Certain disability or second-event rules can extend coverage |
| Certain events affecting spouses/dependents | Potentially up to 36 months | Rules depend on the qualifying event |
| Disability extension | Possible additional 11 months in qualifying cases | Strict notice and Social Security determination rules apply |
What does COBRA cost?
When an employer subsidizes active employees, workers may see only part of the true group-plan premium. Under COBRA, the qualified beneficiary usually pays the full cost of coverage, including the employer-paid share, plus a small administrative fee. That can make the monthly premium materially higher than the payroll deduction the employee remembers.
COBRA vs. Marketplace coverage
HealthCare.gov says losing job-based coverage generally creates a Special Enrollment Period for Marketplace coverage. Consumers can compare premiums, provider networks, deductibles and potential income-based savings before deciding.
| Question | COBRA | Marketplace plan |
|---|---|---|
| Keep same employer plan? | Generally yes | No; choose from available Marketplace plans |
| Provider network | Usually continues under existing plan | Can be different |
| Premium subsidy | Usually employer subsidy ends | Income-based premium tax credits may be available to eligible applicants |
| Enrollment timing | COBRA election deadlines apply | Special Enrollment Period deadlines apply after loss of job-based coverage |
Do not cancel COBRA casually
HealthCare.gov warns that voluntarily ending COBRA outside Open Enrollment does not necessarily create a new Marketplace Special Enrollment Period. If you plan to switch, confirm the effective date and eligibility before terminating existing coverage.
Checklist before choosing
- Compare the full monthly COBRA premium with Marketplace options.
- Check whether doctors, hospitals and prescriptions remain in network.
- Consider deductible and out-of-pocket amounts already accumulated during the year.
- Review the start date of replacement coverage to avoid a gap.
- If Medicare is relevant, review coordination rules carefully; COBRA and Medicare can interact in complex ways.
- Keep all election notices and payment deadlines.
Frequently asked questions
Can I choose COBRA even if I quit my job?
Job loss can be a qualifying event whether voluntary or involuntary, subject to the federal rules and exceptions such as termination for gross misconduct.
Can my spouse take COBRA if I do not?
Qualified beneficiaries can have independent election rights. Review the plan’s election notice for the family members who qualify.
Does COBRA reset my deductible?
Because COBRA continues the same group health plan, existing plan-year accumulations generally continue under that plan, but confirm with the administrator.
Is COBRA always better than Marketplace insurance?
No. COBRA can preserve continuity, while Marketplace coverage may cost less for some households. Compare both.
Sources & further reading
Reviewed October 2, 2026. COBRA eligibility, notices, extensions, Medicare coordination and state continuation rules can be fact-specific; confirm deadlines with the plan administrator.
