Lost Your Job? COBRA vs. Your Other Health Insurance Options
Losing a job is stressful enough without worrying about health insurance. You usually have options, and you usually have some time to choose. Here's how COBRA compares with the alternatives.
What COBRA is
COBRA lets you keep the same health plan you had through your job, usually for up to 18 months after you leave. It generally applies to employers with 20 or more employees, and many states have similar rules for smaller employers.
The catch is cost. Your employer usually stops paying its share, so you can be charged the full premium plus up to a 2% fee. That's often several times what you were paying from your paycheck.
How much time you have
You generally have at least 60 days to elect COBRA, and coverage can be retroactive to the day your old plan ended. Losing job-based coverage also opens a special enrollment period for Marketplace plans, commonly 60 days. Check your exact deadlines in the paperwork from your employer.
Your alternatives
- A Marketplace (ACA) plan. If your income drops after a job loss, you may qualify for premium help that makes this much cheaper than COBRA.
- A spouse's or partner's employer plan. Losing your coverage usually lets you join their plan outside the normal enrollment window. These windows are often short, so act quickly.
- A private plan. These can cost less but work differently from ACA plans, so it's important to understand what is and isn't covered.
- Medicaid. Depending on your state and income, you may qualify.
When COBRA makes sense
COBRA can be worth it if you're in the middle of treatment, have already met a big deductible this year, or need to keep specific doctors. It can also bridge a short gap until a new job's coverage starts.
A timing trap to avoid
If you choose COBRA and later drop it or stop paying, that usually does not open a new special enrollment period. You might have to wait until open enrollment to get a Marketplace plan. Compare your options before you elect COBRA, not after.
Aging off a parent's plan instead? See your options at 26.
