What Is COBRA Insurance?
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that requires employers with 20+ employees to offer continued health coverage for up to 18 months after a qualifying event. State "mini-COBRA" laws may extend this to employers with fewer than 20 employees in some states.
COBRA Qualifying Events
| Qualifying Event | Who Is Covered | Max Duration |
|---|---|---|
| Voluntary or involuntary job loss | Employee + dependents | 18 months |
| Reduction in hours (losing eligibility) | Employee + dependents | 18 months |
| Divorce or legal separation | Spouse + dependents | 36 months |
| Death of covered employee | Spouse + dependents | 36 months |
| Medicare enrollment by employee | Spouse + dependents | 36 months |
| Dependent child losing eligibility | Dependent only | 36 months |
COBRA Costs in 2026
On COBRA, you pay the full premium — both the portion you previously paid AND the portion your employer paid — plus up to a 2% administrative surcharge. The average employer pays about 73% of employee health premiums, meaning COBRA typically costs 3–4x more than what you were paying while employed.
COBRA vs ACA Marketplace — Which Is Cheaper?
Losing job-based coverage is a qualifying life event that opens a 60-day Special Enrollment Period for ACA Marketplace plans. For many people — especially those with household income under $60,000 — a subsidized Marketplace plan will cost far less than COBRA while offering comparable or better coverage.
COBRA makes the most sense when: you are mid-treatment with specific in-network providers you need to keep, you expect to regain employer coverage within a few months, or your income is too high for meaningful ACA subsidies.
Frequently Asked Questions
You have 60 days from either losing coverage or receiving your COBRA election notice (whichever is later) to enroll. Coverage can be elected retroactively — meaning if you elect on day 59, coverage is backdated to day 1, so you're only paying for months you actually need.
Yes, but only during Open Enrollment or if you voluntarily drop COBRA (which triggers a Special Enrollment Period). Simply running out of COBRA also qualifies as a SEP trigger.
Yes — COBRA is the exact same plan you had while employed, including the same provider network, deductibles, copays, and prescription coverage. Nothing changes about the plan itself; only who pays the premium shifts.