How long do I have to decide whether to elect COBRA?

You get at least 60 days from the later of your coverage loss date or the date you receive the official COBRA election notice. Coverage is retroactive if you elect it, so you won't have a gap even if you use most of that window to decide.

Do I have to pay for COBRA the moment I elect it?

No. You have 45 days after electing coverage to make your first premium payment, but that payment usually has to cover you retroactively back to when your old coverage ended, so it can be a large first bill.

Is COBRA always more expensive than an ACA marketplace plan?

Not always, but often. COBRA has no income-based discount since you're paying the full premium plus a 2% fee. Marketplace plans can come with subsidies depending on your household income, so it's worth comparing both before you decide.

What happens if my former employer had fewer than 20 employees?

Federal COBRA generally doesn't apply, but many states have their own "mini-COBRA" laws that require similar continuation coverage for smaller employers. Check your state's rules.

COBRA Health Insurance After a Layoff: What It Actually Costs and When to Use It

COBRA lets you keep your health plan after a layoff, but you pay the full premium plus 2%. Here's the real cost, deadlines, and when it beats the ACA marketplace.

Losing your job usually means losing your health insurance at the same time. COBRA is the federal law that lets you keep your old employer plan for a while after that happens. It's not free, it's not automatic, and it's often not the cheapest option. Here's how it actually works.

What COBRA Actually Is

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act. It requires employers with 20 or more employees to let you continue your exact same group health plan after certain "qualifying events," including job loss, reduced hours, divorce, or a dependent aging out of coverage. You keep the same doctors, same deductible progress, same network — you just pay for all of it yourself now.

What COBRA Actually Costs

This is where people get blindsided. While you were employed, your employer was quietly covering a chunk of your premium. Under COBRA, that subsidy disappears. You should expect to pay up to 102% of the total monthly premium for your coverage. The extra 2% covers administrative costs.

So if your combined premium (your share plus what your employer paid) was $600 a month, your COBRA bill becomes roughly $612. If it was $1,500 for family coverage, expect around $1,530.

Coverage Type	Typical Monthly Range
Individual	$400–$700
Family	$1,200–$2,000+

Actual numbers vary a lot by state, plan type, and what your former employer's plan cost to begin with, so treat these as ballpark figures, not a quote.

The Clock You're On

COBRA runs on strict deadlines, and missing them means losing your rights entirely.

60 days to elect: Qualified beneficiaries must be given an election period of at least 60 days during which each qualified beneficiary may choose whether to elect COBRA coverage, measured from the later of the date of the qualifying event or the date the COBRA election notice is provided.
Coverage is retroactive: COBRA coverage is retroactive if elected and paid for by the qualified beneficiary. That means no gap in coverage even if you wait to decide.
45 days for your first payment: A group health plan cannot require payment for any period of COBRA continuation coverage earlier than 45 days after the day on which the qualified beneficiary made the initial election. That first check often covers several months at once, so budget for it.
How long it lasts: Standard COBRA runs 18 months. If all conditions associated with a second qualifying event are met, the period of continuation coverage for the affected qualified beneficiary is extended from 18 months (or 29 months) to 36 months.
Grace periods matter: Miss a payment and you can lose coverage after the last paid period, so treat the due date like rent.

COBRA vs. the ACA Marketplace

You are not required to take COBRA. Losing job-based coverage also triggers a 60-day special enrollment window for an ACA marketplace plan, and depending on your income for the year, you may qualify for subsidies that make a marketplace plan significantly cheaper than COBRA's full sticker price.

The tradeoffs to weigh:

Network and deductible continuity: COBRA keeps your current doctors and any deductible you've already met. A new marketplace plan usually means starting your deductible over.
Cost: COBRA has no income-based discount. Marketplace premiums can be reduced substantially if your household income qualifies for a subsidy — worth checking even if you assume you won't qualify.
Plan choice: COBRA gives you one plan — the one you already had. The marketplace gives you a menu of tiers (bronze, silver, gold) so you can trade premium cost against out-of-pocket risk.

When COBRA Actually Makes Sense

COBRA is usually the right call when you're mid-treatment for something and switching plans or networks would disrupt care, when you expect to be reemployed within a month or two and don't want the hassle of switching twice, or when a marketplace plan in your area is genuinely worse coverage for a similar price after subsidies.

It's usually the wrong call when you're healthy, don't qualify for employer-paid COBRA subsidies as part of severance, and a subsidized marketplace plan would cost meaningfully less.

Other Options Besides COBRA

Spouse's employer plan: Losing job-based coverage is a qualifying event that lets you join a spouse's plan outside of open enrollment.
Short-term health plans: Cheaper but often exclude pre-existing conditions and cap benefits — a bridge, not a real substitute for major coverage.
Medicaid: If your income drops enough after a layoff, you may qualify, especially in states that expanded Medicaid.

The Bottom Line

COBRA isn't a scam, but it also isn't a deal — you're simply paying the full, unsubsidized cost of insurance that used to be partly hidden in your paycheck. Before you default into it, get a marketplace quote and compare it side by side against your COBRA premium. A five-minute comparison can save you hundreds of dollars a month during a period when your income has already taken a hit. If a layoff has thrown off your whole financial picture, it's also a good time to check your financial grade so you know where you actually stand before making bigger decisions.