COBRA Health Insurance, How Continuing Coverage Works After You Leave a Job

Last updated: May 2026

COBRA is a federal law that lets you keep your former employer's health plan after a qualifying event, such as job loss, reduction in hours, or certain family changes. The trade-off is cost: you now pay the full premium yourself (both the share that used to come out of your paycheck and the share your employer used to cover on your behalf) plus a small administrative fee. That is why COBRA is typically much more expensive than what you paid as an active employee.

Key takeaways

COBRA lets you continue your former employer's health plan for a limited time after a qualifying event such as job loss or reduction in hours.
Plans can charge up to 102% of the total premium (100% + a 2% admin fee), so COBRA is typically much more expensive than the active-employee cost.
Standard coverage lasts 18 months. It can extend to 29 months with an SSA disability determination, or up to 36 months for spouses and dependents in certain events.
Loss of employer coverage is also a qualifying life event for the ACA Marketplace, where a subsidized plan is often cheaper than COBRA. Always compare both before electing.

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What is COBRA?

COBRA is short for the Consolidated Omnibus Budget Reconciliation Act of 1985. It is a federal law that requires most group health plans to offer continuation coverage to employees, spouses, and dependents who lose group health coverage because of certain qualifying events. The continuation plan is exactly the same plan you had as an active employee: same insurer, same network, same benefits. The only thing that changes is who pays the premium.

Who is eligible for COBRA?

Federal COBRA applies to private-sector employers and state and local governments that had 20 or more employees on more than 50% of business days in the prior year. You qualify if you experience a qualifying event while covered under a qualifying group health plan. Federal employees have separate continuation rules under the Federal Employees Health Benefits (FEHB) program. Many states have “mini-COBRA” laws that extend similar protections to smaller employers; the rules and durations vary by state.

A “qualified beneficiary” is any individual covered by the group plan on the day before a qualifying event. This typically includes the employee, the employee's spouse, and any dependent children. Each qualified beneficiary has an independent right to elect COBRA, so a spouse or dependent can elect continuation coverage even if the employee declines it.

What is a COBRA qualifying event?

Different qualifying events trigger different maximum coverage periods:

18-month coverage events

Voluntary or involuntary termination of employment (other than gross misconduct)
Reduction in hours that causes loss of coverage

36-month coverage events (spouse and dependents only)

Death of the covered employee
Divorce or legal separation from the covered employee
Covered employee becoming entitled to Medicare
Dependent child losing dependent status under plan rules

Gross misconduct is the one termination that disqualifies an employee from COBRA, but plans interpret this narrowly and disputes are uncommon.

How much does COBRA cost?

Federal law allows the plan to charge qualified beneficiaries up to 102% of the total cost of coverage. That is the full premium that was previously paid by you and your employer combined, plus a 2% administrative fee. Because most employers pay 70 to 80% of the active-employee premium, the COBRA monthly cost often feels like a 4x to 5x increase compared with your old paycheck deduction.

During the 11-month disability extension (months 19 through 29), the plan can charge up to 150% of the total cost of coverage for the disabled qualified beneficiary's continuation.

How long do I have to elect COBRA?

You have a minimum of 60 days from the later of the date your coverage ends or the date your COBRA election notice is provided. If you elect within the 60-day window and pay the required premiums, coverage is retroactive to the date of the qualifying event, so there is no gap in coverage.

Payment deadlines:

First premium: due no earlier than 45 days after the date of COBRA election.
Subsequent premiums: typically due on the first of the month with a 30-day grace period.

When does COBRA coverage end early?

COBRA coverage can end before the maximum period in several situations:

You fail to pay premiums on time
You become covered under another group health plan (after election)
You become entitled to Medicare (after election)
The employer stops offering any group health plan
For disability extension, a determination that you are no longer disabled

COBRA vs Marketplace vs spouse plan: which is best?

Loss of employer health coverage is a qualifying life event under federal law, which opens a 60-day special enrollment period for both COBRA and the ACA Marketplace. You can also enroll in a spouse's employer plan if their plan allows mid-year enrollment for loss of coverage. Compare these three options using your actual numbers:

COBRA: identical to your former plan (same providers, same benefits). High cost. Use it when you have ongoing treatment, prescriptions, or providers you cannot risk changing.
Marketplace plan: often substantially cheaper if you qualify for subsidies based on expected income. Network and benefits will differ from your former plan.
Spouse's plan: usually the least expensive when available, since you pay only the employee cost share. Confirm your spouse's open enrollment or special enrollment period covers this event.

For more on qualifying events and special enrollment, see qualifying life events and special enrollment periods.

Example: cost comparison after job loss

An employee was paying $200 per month for family coverage at their old job because the employer covered 75% of the $800 total premium. After job loss, COBRA can charge up to 102% of $800, or $816 per month. The same family might qualify for a Marketplace silver plan at $350 per month after subsidies. The tradeoff: COBRA keeps the same network and accumulated deductible spending, while the Marketplace plan resets the deductible and may have a different network. Run both totals over your expected coverage period before deciding.

Compare plans with your numbers

If your situation lets you compare COBRA against a new employer plan, Marketplace plan, or spouse's plan, the Health Plan Compare calculator models total annual cost across realistic usage scenarios. Enter premiums, deductibles, copays, and expected care for each option to see which plan costs the least over the year.

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FAQ

How much does COBRA cost?

Under federal COBRA, the plan can charge up to 102% of the total cost of coverage (100% of the premium plus a 2% administrative fee). Because you pay the full premium that was previously split between you and your employer, the monthly cost is typically much higher than your active-employee paycheck deduction.

How long does COBRA coverage last?

Federal COBRA generally lasts 18 months when coverage ends due to job loss or a reduction in hours. It can extend to 29 months if a qualified beneficiary is determined disabled by the Social Security Administration before day 60 of COBRA coverage. For certain qualifying events affecting spouses and dependents (death of the employee, divorce or legal separation, or Medicare entitlement of the employee), coverage can last up to 36 months.

How long do I have to elect COBRA?

You have at least 60 days from the later of the date you lose coverage or the date your COBRA election notice is provided. Coverage, once elected, is retroactive to the date your previous coverage ended, so there is no gap.

When is my first COBRA premium due?

Plans cannot require your first premium to be paid earlier than 45 days after the date you elect COBRA. After that, monthly premiums are typically due on the first of the month with a 30-day grace period.

Is COBRA cheaper than buying a Marketplace plan?

Usually no, especially if you qualify for Marketplace subsidies. Loss of employer coverage is a qualifying life event that opens a 60-day special enrollment period on the Marketplace. Many people pay less on a subsidized Marketplace plan than on full-price COBRA. Compare both options before electing.

Can I switch from COBRA to a Marketplace plan later?

Yes. When COBRA coverage ends (either when the maximum coverage period expires or because you stop paying premiums voluntarily), you qualify for a Marketplace special enrollment period. However, if you simply stop paying COBRA premiums mid-coverage to switch, you may not qualify for an SEP until the next open enrollment.

Does COBRA cover my spouse and dependents?

Yes. Each qualified beneficiary (the employee, spouse, and dependent children) has an independent right to elect COBRA. Spouses and dependents can elect COBRA even if the employee does not.

Does COBRA apply to all employers?

Federal COBRA applies to private-sector employers and state and local governments with 20 or more employees on more than 50% of business days in the prior year. Many states have similar continuation laws (often called "mini-COBRA") for smaller employers. Federal employees have separate continuation rules under FEHB.

Disclaimer: This calculator and educational content provide estimates for informational purposes only and are not medical, financial, or legal advice. Federal COBRA rules are set by the Department of Labor and the IRS. State continuation laws vary. Always review your specific election notice or consult a qualified professional for guidance on your situation.