Leaving a job, whether by choice or not, usually means your health insurance ends too, often at the end of that month. You have two main options, and the deadlines matter.
Option 1: Keep your plan with COBRA
COBRA is a federal law that lets you, and family members on your plan, stay on your employer's group health plan for a limited time.
Pros: Same plan, same doctors, and your deductible and out-of-pocket progress carry over. That matters if you're mid-treatment or have already met your deductible.
Cons: You pay the full premium, including the share your employer used to pay, plus up to a 2% administration fee (up to 102% of the plan's cost). That's often several times what you paid as an employee.
You have 60 days to elect COBRA, and if you do, coverage is retroactive to the day your old coverage ended. Your first payment is due within 45 days of electing. These rules come from the Department of Labor's COBRA FAQ for workers, which is worth reading before you decide.
Option 2: Enroll in a Marketplace plan
Losing job-based coverage is a qualifying life event that opens a 60-day special enrollment period on HealthCare.gov or your state's exchange. You can apply up to 60 days before your coverage ends, too. HealthCare.gov's COBRA page explains how to compare the two.
If your income drops after leaving a job, you may qualify for a premium tax credit that makes a Marketplace plan far cheaper than COBRA. You may also qualify for Medicaid, depending on your state and income.
Comparing the two
| COBRA | Marketplace plan | |
|---|---|---|
| Monthly cost | Full premium + up to 2% | Varies; may be reduced by subsidies |
| Doctors and network | Same as before | Depends on the plan you choose |
| Deductible progress | Carries over | Starts over |
| How long | Usually up to 18 months | As long as you're eligible |
A simple way to decide
- Ask your former employer's benefits administrator for your COBRA premium.
- Estimate your household income for the rest of the year and preview Marketplace prices.
- Check whether your doctors and prescriptions are covered in Marketplace plans, and what kind of network each plan uses (HMO vs. PPO vs. EPO).
- If you've already met most of your deductible or are in active treatment, COBRA's continuity may be worth the cost. Otherwise, compare carefully.
Be careful about dropping COBRA later: canceling it yourself doesn't open a special enrollment period, so you'd have to wait for open enrollment. When COBRA runs out on its own, you get a new 60-day window.
For more on enrollment and subsidies, read ACA open enrollment for 2027.
