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COBRA Health Insurance: How to Keep Your Job-Based Coverage After Leaving a Job

COBRA lets you keep your old employer's health plan for a while after you leave a job, but it works β€” and costs β€” differently than most people expect.

COBRA lets you temporarily keep your exact same plan

COBRA (the Consolidated Omnibus Budget Reconciliation Act) is a federal law that lets eligible employees and their covered family members continue the same employer-sponsored health plan for a limited time after a 'qualifying event,' like losing or leaving a job.

Job loss is the most common qualifying event, but not the only one

Losing coverage due to termination (other than for gross misconduct) or a reduction in hours is the most common trigger, but divorce, a covered employee's death, or a dependent child aging off the plan can also qualify a family member for COBRA.

Coverage typically lasts 18 or 36 months

Job loss or reduced hours generally qualifies you for up to 18 months of COBRA coverage, while some other qualifying events, like divorce or the covered employee's death, can extend eligibility up to 36 months for affected dependents.

It generally only applies to employers with 20 or more employees

Federal COBRA typically covers private-sector employers with 20 or more employees. Many states have their own 'mini-COBRA' laws extending similar continuation rights to employees of smaller companies, with their own separate rules.

You have 60 days to decide

After receiving your COBRA election notice, you generally have 60 days to decide whether to elect coverage. You don't have to decide immediately, and if you do elect it, coverage can apply retroactively back to the day your job-based coverage ended.

You pay the full premium, plus an admin fee

While employed, your employer typically covers a significant share of your premium. Under COBRA, you generally pay the entire premium yourself β€” both your old share and the employer's former share β€” plus an administrative fee of up to 2% on top, which is why COBRA premiums often come as a surprise.

It isn't automatic β€” you have to actively elect it

Losing job-based coverage doesn't put you on COBRA automatically. Your former employer or its plan administrator is required to send you an election notice, and you have to actively choose and pay for coverage within the deadline for it to take effect.

It's usually worth comparing against other options

Losing job-based coverage is itself a 'qualifying life event' that opens a special enrollment window for ACA marketplace plans, which may end up cheaper than COBRA, especially if you qualify for premium subsidies based on your income. Medicaid eligibility is also worth checking if your income has dropped.

Why COBRA exists

Before COBRA became law in 1985, losing a job could mean losing health coverage overnight, with no bridge to a new plan. COBRA doesn't make coverage cheaper β€” it just guarantees the legal right to keep your existing plan temporarily, which matters most for people mid-treatment who don't want to switch doctors or plans abruptly.

COBRA is rarely the cheapest option, but it has one advantage

Because COBRA keeps you on the exact same plan, with the same doctors, network, and deductible you already had, it can be worth the higher cost for people mid-treatment or who have already met a plan-year deductible. For everyone else, it's worth pricing out ACA marketplace plans before defaulting to COBRA.

Frequently Asked Questions

Can I switch from COBRA to a marketplace plan later if I change my mind?

Generally yes, but timing matters β€” losing job-based coverage opens a marketplace special enrollment window that is time-limited, and electing COBRA doesn't necessarily reopen or extend that window indefinitely, so it's worth researching both options early rather than defaulting to COBRA and deciding later.

Does COBRA cover dental and vision too?

If your employer's dental or vision coverage was part of the same group health plan you're continuing, it can generally be continued under COBRA as well, often as a separate election from medical coverage.

What if I get a new job with health benefits while on COBRA?

COBRA coverage generally ends once you become covered under another group health plan, though there can be a brief overlap period; check your specific plan's rules on the exact cutoff.

Is there a way to get COBRA at a discounted rate?

Occasionally, Congress has passed temporary COBRA premium subsidies during specific economic circumstances, but there is no standing federal subsidy for COBRA premiums in general β€” always check current federal and state programs rather than assuming a discount applies.