Losing a job means losing your employer health coverage, and you typically have 60 days to figure out what comes next. The two main options are COBRA continuation coverage and an ACA Marketplace plan through a Special Enrollment Period. For most people in 2026, the Marketplace is significantly cheaper, but COBRA may make sense depending on your situation. This guide breaks down costs, timelines, and how to decide.
What Is COBRA Coverage?
COBRA (Consolidated Omnibus Budget Reconciliation Act) lets you keep your exact employer-sponsored health plan after leaving a job. The coverage is identical to what you had, including your same doctors, network, and prescription drug coverage.
The catch: you pay the full premium yourself. While employed, your employer typically covered a large share of the monthly premium. Under COBRA, you pay 100% of the premium plus a 2% administrative fee.
Who qualifies for COBRA:
- Employees who lose coverage due to reduced hours or job loss (voluntary or involuntary)
- Spouses and dependents covered under the employer plan
- Employees who become eligible for Medicare
How long COBRA lasts:
- 18 months for most job loss situations
- 29 months if you are disabled at the time of job loss
- 36 months for dependents in certain circumstances (divorce, death of covered employee)
You have 60 days from losing coverage to elect COBRA, and coverage is retroactive if you enroll within that window. This means if you have no medical bills in month one, you can wait and enroll later if needed.
What Is a Marketplace Special Enrollment Period?
Losing job-based health coverage is a qualifying life event that opens a 60-day Special Enrollment Period (SEP) on the ACA Marketplace at HealthCare.gov or your state exchange. You do not have to wait for open enrollment.
Marketplace plans are organized into metal tiers: Bronze, Silver, Gold, and Platinum. Silver plans are often the best value when you qualify for subsidies, because income-based cost-sharing reductions only apply to Silver plans.
COBRA vs Marketplace: Cost Comparison in 2026
Cost is usually the deciding factor. Here is how the two options compare.
COBRA Costs in 2026
COBRA requires you to pay the full employer-sponsored premium. The average employer-sponsored health plan in 2025 costs roughly $8,900 per year for individual coverage and around $25,500 for family coverage (according to KFF employer health benefits data). Under COBRA, you absorb the entire amount.
Typical monthly COBRA premiums in 2026:
| Coverage Type | Estimated Monthly COBRA Cost |
|---|
| Individual | $500 to $900 per month |
| Individual + Spouse | $1,200 to $1,800 per month |
| Family | $1,500 to $2,500 per month |
Costs vary significantly by state, employer plan, and insurer. Some employer plans have lower premiums that make COBRA more manageable.
ACA Marketplace Costs in 2026
Marketplace costs depend heavily on income. If your income falls within subsidy-eligible ranges, you may qualify for premium tax credits that reduce your monthly payment significantly.
Important 2026 change: The enhanced subsidies that were in place from 2021 through 2025 expired on December 31, 2025. Starting in 2026, subsidy eligibility returns to the standard income range of 100% to 400% of the Federal Poverty Level (FPL). This means people above 400% FPL no longer receive premium tax credits.
2026 ACA Subsidy Eligibility by Income and Household Size:
| Household Size | 100% FPL | 138% FPL | 250% FPL | 400% FPL |
|---|
| 1 person | ~$15,650 | ~$21,597 | ~$39,125 | ~$62,600 |
| 2 people | ~$21,150 | ~$29,187 | ~$52,875 | ~$84,600 |
| 3 people | ~$26,650 | ~$36,777 | ~$66,625 | ~$106,600 |
| 4 people | ~$32,150 | ~$44,367 | ~$80,375 | ~$128,600 |
Notes on eligibility:
- In Medicaid expansion states: you need income above 138% FPL to qualify for Marketplace subsidies. Below that, Medicaid typically covers you.
- In non-expansion states: coverage gap exists between 100% and 138% FPL where neither Medicaid nor subsidized Marketplace coverage may be available.
- Above 400% FPL: no premium tax credits in 2026.
If you qualify for subsidies, Marketplace plans are typically far cheaper than COBRA. You pay a percentage of your income toward the benchmark Silver plan, ranging from about 2.1% to 9.96% of household income in 2026. That comes out to roughly $27 to $130 per month for someone earning $15,000 per year, compared to $500 to $900 for COBRA.
If you do not qualify for subsidies (income above 400% FPL), unsubsidized Marketplace premiums may be comparable to or higher than COBRA depending on your location and plan.
Side-by-Side Comparison
| Factor | COBRA | ACA Marketplace |
|---|
| Coverage continuity | Same plan, same doctors | New plan, new network |
| Cost | 100% of premium plus 2% admin fee | Varies, often subsidized |
| Subsidy available | No | Yes, if income qualifies |
| Duration | Up to 18 to 36 months | Year-round, renews annually |
| Enrollment window | 60 days from job loss | 60 days from job loss |
| Effective date | Can be retroactive | Usually first of following month |
| Cost-sharing reductions | No | Yes, on Silver plans with low income |
| Network | Keep existing doctors | May need new providers |
| Pre-existing conditions | Covered | Covered |
When COBRA Makes More Sense
COBRA is the right call in certain situations:
You have ongoing care with specific providers. If you are mid-treatment with a specialist, therapist, or surgeon, switching plans mid-year risks losing in-network access. COBRA keeps your exact coverage intact.
You are close to meeting your annual deductible. If you have already spent $2,000 toward a $3,000 deductible by mid-year, switching to a new plan resets that deductible to zero. Staying on COBRA lets you benefit from the spending you have already done.
Your income is above 400% FPL. If your household income is too high for subsidies, Marketplace premiums may not be cheaper than COBRA, especially for comprehensive coverage. Compare actual plan costs before deciding.
You expect to find a new job quickly. COBRA is retroactive if you enroll within 60 days. Some people wait, pay out of pocket for small expenses, and only enroll if they have a significant medical event. This is a calculated risk, not a recommendation for everyone.
You are near the end of a deductible year. If you lose your job in October and your deductible year matches the calendar year, a few months of COBRA may be cheaper than resetting your deductible on a new plan.
When Marketplace Makes More Sense
The Marketplace is typically the better choice when:
Your income qualifies for subsidies. This is the biggest factor. If your projected annual income for the year falls between 138% FPL (or 100% FPL in non-expansion states) and 400% FPL, you may qualify for premium tax credits that make Marketplace coverage dramatically cheaper than COBRA.
Your income dropped significantly after job loss. When estimating your Marketplace subsidy, you project your income for the full calendar year, not just your past earnings. If you lost your job in March, your full-year income may be much lower than your prior salary, increasing your subsidy amount.
You need longer-term coverage. COBRA maxes out at 18 months for most situations. Marketplace coverage has no expiration and you can renew each year.
Your employer plan was expensive. If your employer's plan had high premiums even before you had to pay the full amount, COBRA will be costly. A Marketplace Silver plan may offer comparable coverage at a lower price.
How to Enroll After Job Loss
Enrolling in COBRA
- Your employer or their COBRA administrator must send you an election notice within 14 days of losing coverage.
- You have 60 days from the date you receive the notice (or the date coverage ends, whichever is later) to elect COBRA.
- If you elect, you have 45 days to pay the first premium.
- Coverage is retroactive to your loss of coverage date.
Enrolling in a Marketplace Plan
- Go to HealthCare.gov (or your state exchange if applicable).
- Create or log in to your account.
- Select "I lost or will soon lose coverage" as your qualifying event.
- Enter your household income. For job loss mid-year, estimate your total income for the entire calendar year (wages earned before job loss plus any expected income after).
- Compare available plans. Silver plans often provide the best value if you qualify for cost-sharing reductions (income below 250% FPL).
- Enroll. Coverage typically starts the first day of the month after you enroll.
Consider Medicaid First
Before choosing between COBRA and the Marketplace, check whether you qualify for Medicaid. In the 41 states that have expanded Medicaid, adults with income up to 138% FPL qualify regardless of assets. Medicaid is typically free or very low cost.
You can check your Medicaid eligibility at the same time you explore Marketplace options. If your income is low enough for Medicaid, that is usually the most cost-effective option.
Use the Benefits Navigator screener at /screener to check eligibility for Medicaid, Marketplace subsidies, and other programs in one place.
The 60-Day Window: Do Not Miss It
Both COBRA and the Marketplace SEP have a 60-day enrollment window. Missing that window means you could go uninsured until the next open enrollment period (November 1 through January 15 for most states).
Some people elect COBRA first as a safety net, then switch to a Marketplace plan during open enrollment or another qualifying event. This is allowed, but you will pay COBRA premiums until your Marketplace coverage begins.
Calculating What You Will Actually Pay
The best approach is to get actual numbers before deciding.
For COBRA: request your exact premium amount from your employer's HR or benefits administrator. This is the employer's full premium cost, not just your payroll deduction.
For Marketplace: use the subsidy calculator at HealthCare.gov or a third-party tool. Enter your projected income for the full year, not just your current income.
Run both calculations, then compare total monthly costs including premiums, deductibles, and any ongoing prescriptions or care needs.
Frequently Asked Questions
Can I switch from COBRA to a Marketplace plan?
Yes. You can drop COBRA at any time and enroll in a Marketplace plan during open enrollment (typically November 1 through January 15). You may also qualify for a SEP if you voluntarily drop COBRA, though rules vary and not all states treat voluntary COBRA cancellation as a qualifying event. Losing COBRA coverage (reaching the maximum duration) is always a qualifying event for a Marketplace SEP.
Does COBRA cover pre-existing conditions?
Yes. COBRA is a continuation of your existing employer plan, so all pre-existing conditions remain covered. ACA Marketplace plans also cannot deny coverage or charge higher premiums based on pre-existing conditions.
What happens if I can't afford COBRA and miss the 60-day window?
If you miss both the COBRA election window and the Marketplace SEP, you generally cannot enroll in health coverage until open enrollment unless you have another qualifying life event (marriage, having a child, moving to a new state, etc.). You may still qualify for Medicaid at any time if your income is low enough, as Medicaid has no enrollment windows.
Can I have COBRA and Marketplace coverage at the same time?
Technically yes, but it is almost never cost-effective. Having both does not reduce what you pay for either. If you enroll in a Marketplace plan, you should cancel COBRA to avoid paying two premiums.
How do I estimate my income for Marketplace subsidies after job loss?
You estimate your projected total income for the entire calendar year, not just your income going forward. Add up wages earned before your job loss, any severance pay, unemployment benefits, and any other income you expect for the rest of the year. A lower projected annual income means a larger subsidy.
Are COBRA premiums tax deductible?
COBRA premiums may be deductible as a medical expense if your total medical expenses exceed 7.5% of your adjusted gross income and you itemize deductions. This is a relatively high bar for most people. Marketplace premium tax credits are a more direct form of tax savings if you qualify.
What if I live in a state that did not expand Medicaid?
In the 10 states that have not expanded Medicaid, adults without dependent children typically do not qualify for Medicaid. If your income falls between roughly $14,000 and $20,000 for a single person, you may fall into a coverage gap where you earn too much for traditional Medicaid but too little for meaningful Marketplace subsidies. COBRA would still be available, but the cost may be unaffordable. Some states and local organizations offer low-cost clinic options in this situation.
When does my COBRA coverage start?
COBRA coverage starts the day after your employer-sponsored coverage ends. If you elect COBRA within the 60-day window, your coverage is retroactive to that start date. You do not have to pay premiums until you actually elect COBRA, so if you go without medical care for several weeks, you can wait before officially enrolling.
Use the free Benefits Navigator screener at /screener to check your eligibility for Marketplace subsidies, Medicaid, and other programs based on your income and household size. It takes about two minutes and covers programs across all 50 states.
