Losing your job is stressful enough without a health insurance deadline ticking in the background. You usually have two main choices: keep your old plan through COBRA, or switch to a Marketplace plan. The right answer depends on cost, your doctors, and how much of your deductible you’ve already paid.
Key takeaways
- COBRA lets you keep the same plan, usually for up to 18 months — but you can be charged up to 102% of the full premium.
- Losing job-based coverage gives you a 60-day Special Enrollment Period for a Marketplace plan.
- Marketplace plans may come with premium tax credits based on your new, lower income. COBRA doesn’t.
- Watch out: if you choose COBRA and then drop it voluntarily, you generally can’t switch to a Marketplace plan until the next open enrollment.
How COBRA works
COBRA is a federal law that lets you and your family keep your employer’s group health plan after you leave a job, have your hours cut, or experience certain other events. Employers with 20 or more employees are generally required to offer it, and many states have similar “mini-COBRA” laws for smaller employers.
- How long: generally up to 18 months; up to 29 months with a qualifying disability, or 36 months for some family members after certain events.
- Cost: up to 102% of the total premium — your share plus what your employer used to pay, plus a 2% admin fee.
- Deadline to elect: at least 60 days from when coverage ends or you get the election notice, whichever is later. Coverage is retroactive once you elect and pay, and the first payment is due within 45 days of electing.
How a Marketplace plan works after job loss
Losing job-based coverage is a qualifying life event, so you can enroll in a Marketplace plan outside open enrollment — usually within 60 days before or after the loss. Your premium tax credit is based on your estimated household income for the whole year, so if you’ll earn less after the job ends, you may qualify for significant help.
COBRA vs. Marketplace at a glance
| COBRA | Marketplace plan | |
|---|---|---|
| Same doctors & plan | ✅ Yes | Depends on the plan you pick |
| Deductible progress kept | ✅ Yes, for the rest of the plan year | ❌ Starts over |
| Premium help | ❌ No (unless a former employer pays part) | ✅ Premium tax credits if eligible |
| Typical monthly cost | Often high | Can be much lower with subsidies |
| How long | Usually 18 months | As long as you keep paying and remain eligible |
When COBRA makes sense
- You’ve already met most of your deductible or out-of-pocket maximum this year.
- You’re in the middle of treatment and can’t risk changing doctors or drug coverage.
- You expect a new job with benefits soon and only need a short bridge.
- Your income is too high to qualify for Marketplace subsidies, and COBRA is competitive.
When a Marketplace plan makes sense
- Your income this year will be lower and you qualify for premium tax credits.
- Your doctors are in a Marketplace plan’s network.
- You’re early in the plan year, so you haven’t built up deductible progress.
- You’ll need coverage longer than COBRA lasts.
The mistake to avoid
If you enroll in COBRA and later voluntarily drop it outside open enrollment, that usually does not qualify you for a Special Enrollment Period — you could be left without coverage until the next open enrollment. If COBRA runs out, or your cost rises because your former employer stops contributing, you can switch. So compare carefully before you elect COBRA.
Other options to check
- A spouse’s or parent’s plan — losing coverage lets you join a family member’s employer plan mid-year (usually within 30 days). Under 26? You can usually join a parent’s plan.
- Medicaid — if your income drops sharply, you may qualify. You can apply any time.
- Medicare — if you’re 65 or close, read our Medicare at 65 checklist. COBRA doesn’t protect you from Medicare late penalties.
Related: Special Enrollment Periods explained · Health insurance if you’re self-employed
Sources: U.S. Department of Labor; CMS “Understanding COBRA” job aid; HealthCare.gov. For education only — not insurance or legal advice. Last reviewed October 2026.