What Is COBRA?
COBRA is a federal law that lets you keep your employer's health insurance plan after you leave a job, get laid off, or lose coverage due to reduced hours. The catch: you pay the entire premium — including the portion your employer used to pay — plus a 2% administrative fee.
What COBRA Actually Costs
- Individual: $500-$700/month (average)
- Family: $1,500-$2,200/month (average)
Most people are shocked by COBRA prices because they've never seen the full cost of their employer plan. Your employer was paying 70-80% of the premium — COBRA makes you pay 100%.
COBRA vs. ACA Marketplace vs. Private Plans
COBRA: $500-$700/month, same plan you had, no subsidies
ACA marketplace: $0-$150/month with subsidies, new plan, may have different network
Private plan: $300-$800/month, no subsidies, purchased directly from carrier
For most people, ACA marketplace plans with subsidies are significantly cheaper than COBRA. If your income is above ~$60,000, compare COBRA against private plans — you may find similar coverage for less.
Important: You can start COBRA and switch to a marketplace plan later — but NOT the other way around. Once you decline COBRA, you can't go back. If you're unsure, elect COBRA within the 60-day window (you have 60 days to decide), then shop the marketplace. You can cancel COBRA any time.
COBRA Timeline
- 60 days to elect COBRA after losing coverage
- 18 months of continuation coverage (36 months in some cases)
- 45 days after electing to make your first payment (retroactive to loss date)
Losing employer coverage also triggers a 60-day Special Enrollment Period for ACA marketplace plans. These timelines run simultaneously.
Related Terms
Last updated: March 30, 2026.
