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COBRA continuation coverage · 2026 guide

COBRA explained —
the real cost, the 60-day window, and your alternatives.

COBRA lets you keep your employer’s group health plan after leaving a job — but you pay the full premium yourself, plus a 2% administrative fee. For most people, COBRA is significantly more expensive than they expect. This page explains exactly what COBRA costs, when it makes sense, and what alternatives exist while you decide.

What COBRA is

COBRA is continuation of your employer plan — at your employer’s cost

COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that requires most employers with 20 or more employees to offer departing employees and their dependents the option to continue their group health coverage. The coverage is identical to what you had as an employee — same network, same plan, same benefits.

The difference is cost. While employed, your employer typically paid a significant share of your premium — the national average employer contribution for single coverage is $7,529/year ($627/month) in 2024, and for family coverage $21,994/year ($1,833/month). On COBRA, you pay all of that yourself, plus a 2% administrative fee. The coverage is good — the cost is the problem.

The COBRA cost shock
Most people don’t know what their employer was paying until they get the COBRA notice. If your employer was paying $800/month toward your family premium, your COBRA bill will be your $400 share plus that $800 plus 2% — roughly $1,224/month for the same plan that cost you $400 as an employee. This is the most common source of COBRA sticker shock. Source: KFF 2024 Employer Health Benefits Survey.

Who qualifies for COBRA?

COBRA applies when a qualifying event causes you to lose group health coverage. Common qualifying events include losing your job (voluntary or involuntary — but not for gross misconduct), having your hours reduced below the threshold for benefits eligibility, divorce or legal separation from a covered employee, death of the covered employee, and a dependent child aging off the plan.

COBRA is only available from employers with 20 or more employees. Employees of smaller employers may have state continuation options — sometimes called “mini-COBRA” — with varying durations and rules. Check with your state’s Department of Insurance.

COBRA at a glance — 2026
Employer minimum size20+ employees
Who pays the premiumYou — 100% + 2%
Maximum duration18 months (36 in some cases)
Election window60 days from notice
Coverage qualityIdentical to your employer plan
Pre-existing conditionsCovered — no exclusions
ACA minimum essential coverageYes
Source: U.S. Department of Labor — COBRA
Typical COBRA costs — 2024 national averages
Single coverage~$8,680/yr ($723/mo)
Family coverage~$25,024/yr ($2,085/mo)
Full premium + 2% admin fee. Actual cost depends on your former employer’s plan. Source: KFF 2024 Employer Benefits Survey.
The election window

You have 60 days to decide — and the clock starts on the later of two dates

When you lose coverage, your employer is required to send a COBRA election notice within 14 days. Your 60-day election window starts from the later of the date you lose coverage or the date you receive the notice. If you elect COBRA, coverage is retroactive to the date you lost coverage — so you can wait the full 60 days before deciding, as long as you haven’t incurred major medical bills that would require coverage.

Day 0
Qualifying event — you lose your job, hours are reduced, or another qualifying event occurs. Coverage typically ends at end of the month.
Day 14
Employer notifies plan administrator — required within 30 days of the qualifying event. Plan administrator then has 14 days to send you the election notice.
Day 44+
COBRA election notice arrives — the notice explains your rights, the premium cost, and how to elect coverage. This starts (or restarts) your 60-day clock if it’s later than the coverage loss date.
Day 60
Election deadline — you must elect COBRA by this date or lose the right permanently. If you elect, coverage is retroactive to the date you lost it. You then have 45 days to pay the first premium.
Month 18
COBRA ends for most qualifying events. Loss of COBRA is a qualifying event that triggers an ACA Special Enrollment Period — you can enroll in a marketplace plan within 60 days.
The strategic use of the 60-day window
Because COBRA coverage is retroactive if elected, you can wait the full 60 days before deciding. If you stay healthy during that window, you can choose a less expensive alternative (ACA marketplace plan, Health Share) without paying COBRA premiums for those 60 days. Important: if you incur significant medical expenses during the window and then elect COBRA retroactively, you will owe all the back premiums immediately. This approach carries meaningful risk and should not be treated as a guaranteed savings strategy. Consult a licensed agent before making this decision.
COBRA vs. your alternatives

When COBRA makes sense — and when it doesn’t

Option Monthly cost (est.) Pre-existing conditions Best for
COBRA $723–$2,085/mo avg Covered — no exclusions Short gaps with complex pre-existing conditions or active treatment; when your employer plan is unusually good
ACA marketplace (subsidized) $133–$520/mo est. Covered by law Most people with income 100%–400% FPL — losing employer coverage triggers an ACA Special Enrollment Period
ACA marketplace (unsubsidized) $400–$700/mo est. Covered by law Incomes above 400% FPL who need guaranteed pre-existing coverage and don’t qualify for COBRA
Health Share $150–$350/mo est. Often excluded / waiting period Healthy individuals above the subsidy cliff; not suitable if actively treating a pre-existing condition
Short-term medical $70–$165/mo est. Excluded — look-back applies Short gaps for healthy individuals; not suitable for pre-existing conditions or as a COBRA replacement
When COBRA is worth the cost
COBRA makes the most financial sense when you or a dependent are actively in treatment for a serious condition, midway through meeting a deductible, or receiving care that would be excluded as a pre-existing condition on any alternative plan. Switching coverage mid-treatment can mean starting over on deductibles, losing in-network providers, or having conditions excluded entirely. In those situations, paying COBRA’s higher premium may cost less than the disruption of switching.
When alternatives are worth exploring
If you are generally healthy, have no active treatment in progress, and your income falls between 100%–400% FPL, losing employer coverage is an ACA Special Enrollment Period trigger — you can enroll in a subsidized marketplace plan within 60 days. For most people in that situation, a marketplace plan with a subsidy will cost significantly less than COBRA. Use the comparison tool to see your estimated numbers.
COBRA and the ACA Special Enrollment Period
Losing employer-sponsored coverage — including when COBRA ends — is a qualifying life event that triggers a 60-day ACA Special Enrollment Period. You do not need to wait for Open Enrollment to enroll in a marketplace plan. This means when COBRA ends at 18 months, you can transition directly to an ACA plan without a gap. If you elect COBRA initially but change your mind, voluntarily dropping COBRA does not trigger an SEP — only involuntary loss of coverage does. Plan accordingly before dropping COBRA mid-stream. Source: healthcare.gov — Special Enrollment Periods.

See how COBRA costs compare to ACA plans and Health Shares for your income

Enter your ZIP code, household size, and income. The tool shows what marketplace plans and alternatives cost side by side — no forms, no data collected.

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COBRA — common questions

COBRA continuation coverage — questions people ask most

How long does COBRA last?
For most qualifying events — job loss or reduction in hours — COBRA lasts up to 18 months. The duration extends to 36 months in certain situations: a dependent who loses coverage due to the employee’s death, divorce, or legal separation; a dependent child who ages off the plan; or a second qualifying event that occurs during an existing COBRA period. Some states have their own mini-COBRA laws for smaller employers with extended durations.
Is COBRA retroactive if I wait to elect it?
Yes. If you elect COBRA within your 60-day window, coverage is retroactive to the date you lost your employer coverage — there is no gap. You will owe all premiums from the date of loss through the election date, payable within 45 days of electing. This retroactivity is what makes the strategic wait-and-see approach possible — but it carries risk if you incur large medical bills during the window that you then cannot afford to cover by paying the back premiums.
Can I switch from COBRA to an ACA marketplace plan?
Yes, but timing matters. When your COBRA coverage ends — either because the 18-month period is up or because you can no longer afford the premiums and lose coverage involuntarily — that triggers a 60-day ACA Special Enrollment Period. However, if you voluntarily drop COBRA (simply stop paying), that does not trigger an SEP. You would have to wait for the next Open Enrollment period (November 1–January 15) to enroll in a marketplace plan, which could leave you with a significant coverage gap. If you know you want to switch, plan ahead and time it so that COBRA expires naturally.
Does losing employer coverage qualify me for an ACA Special Enrollment Period?
Yes. Losing employer-sponsored health coverage — including COBRA expiration — is one of the most common qualifying events for an ACA Special Enrollment Period. You have 60 days from the date of coverage loss to enroll in a marketplace plan. This applies whether you are leaving a job voluntarily or involuntarily. You do not need to elect COBRA first to preserve your SEP eligibility. If you are subsidy-eligible, enrolling in a marketplace plan immediately after losing employer coverage is almost always less expensive than electing COBRA. Source: healthcare.gov.
What is mini-COBRA and does it apply to me?
Mini-COBRA refers to state continuation coverage laws that apply to employers with fewer than 20 employees — who are not subject to federal COBRA. Many states have enacted their own continuation coverage requirements for small employers. Duration, cost, and qualifying events vary by state. If your employer has fewer than 20 employees and you lose coverage, check with your state’s Department of Insurance to see if state continuation coverage is available to you.
Can I add a Health Share or DPC membership while on COBRA?
Yes — Health Shares and DPC memberships are not insurance and can be enrolled in at any time, regardless of other coverage. Some people on COBRA add a DPC membership to reduce out-of-pocket costs for routine primary care visits, since DPC provides unlimited primary care for a flat monthly fee without using insurance. Health Shares are a separate product and not a complement to COBRA — they are an alternative to ACA coverage, not a supplement to an existing plan. See the DPC guide and Health Shares guide for more.
Sources: U.S. Department of Labor — COBRA · KFF 2024 Employer Health Benefits Survey · healthcare.gov — Special Enrollment Periods · IRS Rev. Proc. 2025-25