COBRA After Job Loss: Cost, Duration & When the Marketplace Is Cheaper

Losing a job usually means losing the health plan attached to it, often on the last day of the month you leave. In that moment you typically face two realistic paths: pay to keep the exact employer plan you already have through COBRA, or switch to an Affordable Care Act (ACA) Marketplace plan using the special enrollment period that a coverage loss unlocks. Both are legitimate. Which one is cheaper depends almost entirely on your income, your expected medical use for the rest of the year, and whether you need to keep your current doctors mid-treatment.

This guide walks through what COBRA actually costs, how long it lasts (the difference between 18 and 36 months matters more than most people realize), and how to run an honest side-by-side against a 2026 Marketplace plan. It also flags a moving target: the enhanced ACA subsidies that made Marketplace coverage dramatically cheaper from 2021 through 2025 expired on December 31, 2025, which reshapes the comparison for 2026. We will tell you where to check the live status rather than guess.

What COBRA is — and why it costs what it costs

COBRA (the Consolidated Omnibus Budget Reconciliation Act) is a federal law that lets you continue the exact group health plan you had at work after a qualifying event such as job loss. Nothing about the plan changes: same insurer, same network, same deductible, same prescription formulary, and any spending you have already put toward your deductible and out-of-pocket maximum this year carries over. For someone mid-treatment or mid-deductible, that continuity is the single biggest reason to choose COBRA.

The catch is price. While you were employed, your employer likely paid the majority of your premium. Under COBRA, you pay the entire premium — your old share plus the employer's share — and the plan may add up to a 2% administrative fee. That is where the familiar figure comes from: the maximum COBRA charge is 102% of the total plan cost for similarly situated employees, per the U.S. Department of Labor. If the full cost of your coverage was $700 per month and your employer covered $525 of it, your COBRA bill becomes roughly $714 per month — not the $175 you used to see deducted from your paycheck. The number did not change; your visibility into the number did.

COBRA generally applies to private-sector employers with 20 or more employees. Smaller employers are exempt from federal COBRA, though many states run "mini-COBRA" programs that extend similar rights to smaller groups — one of several reasons your options vary by state.

How long COBRA lasts: 18 vs 36 months

COBRA duration is not one number. It is tied to the qualifying event that triggered it, and the gap between the two tiers is large.

Two points deserve emphasis. First, a plain job loss gives you 18 months, not 36 — the 36-month events are mostly family-status changes. Second, the 11-month disability extension is easy to miss: if the Social Security Administration determines that you (or a covered family member) were disabled at the time of the job loss or within the first 60 days of COBRA, you can extend an 18-month period to 29 months total. During those extra 11 months, the plan is allowed to charge up to 150% of the total cost instead of 102%, so the extension buys time, not savings. You must notify the plan administrator of the disability determination within the plan's deadline (typically 60 days of the SSA ruling and before the initial 18 months end) or you lose the extension.

Your Marketplace alternative: a 60-day special enrollment period

Losing job-based coverage is a "qualifying life event" that opens a special enrollment period (SEP) on the ACA Marketplace. You generally have 60 days from the date your coverage ends to pick a plan — and you can often apply up to 60 days before the loss to avoid a gap. Coverage typically starts the first day of the month after you enroll. Miss the 60-day window and, absent another qualifying event, you wait for Open Enrollment (for 2026 plans, the November 1, 2025–January 15, 2026 window that has already passed for most states as of mid-2026).

Critically, electing COBRA does not use up your Marketplace SEP — but voluntarily dropping COBRA mid-stream generally does not create a new SEP. Exhausting your COBRA (reaching the end of the 18 or 36 months) does trigger one. The practical takeaway: decide between COBRA and the Marketplace during your initial 60-day window, because switching later is harder than it looks.

The 2026 subsidy reset: why the comparison changed

From 2021 through 2025, temporary enhanced premium tax credits (from the American Rescue Plan and Inflation Reduction Act) capped Marketplace premiums as a share of income and removed the old income ceiling on subsidies. Those enhancements expired on December 31, 2025, and were not extended for 2026. As a result, the pre-2021 rules — including the 400%-of-federal-poverty-level "subsidy cliff" — apply again for 2026. Households above roughly 400% of the poverty line can lose premium assistance entirely, and even subsidized enrollees pay more: KFF estimates the average subsidized enrollee's out-of-pocket premium payment rose about 114% for 2026 (from roughly $888 to about $1,904 per year).

This is a genuinely unsettled area. As of August 2026, the U.S. House passed a three-year extension of the enhanced credits by a 230–196 vote on January 8, 2026, but the Senate had not acted, and the outcome remains uncertain. Because your subsidy — and therefore whether the Marketplace beats COBRA — hinges on rules that could still change, verify current amounts before you decide. Check HealthCare.gov for the live plan-shopping tool and KFF for the latest policy status. Do not assume the "8.5% of income cap" or "no income limit" language you may see in older articles still applies for 2026 — it does not, unless Congress restores it.

Running the real cost comparison

COBRA's price is fixed and knowable. The Marketplace price is your net premium after any 2026 subsidy — which depends on your income for the year, not your old salary. Because job loss usually lowers your annual income, some people who assumed they earned too much for help actually qualify once they estimate their real 2026 income. Use this if/then checklist to narrow your choice:

• If you are mid-treatment, mid-deductible, or want to keep specific in-network doctors → COBRA preserves your exact plan and your year-to-date spending. Strongly favor COBRA.
• If your estimated 2026 household income is modest and likely below the 400%-of-poverty cliff → price out a subsidized Marketplace plan first; it is often cheaper than paying 102% of a full group premium.
• If your income is comfortably above 400% of poverty for 2026 → you likely get no subsidy this year, so compare COBRA's 102% price against the full unsubsidized Marketplace premium head-to-head.
• If you expect to start a new job with benefits within a month or two → COBRA can be a short bridge, and you can even elect it retroactively within the 60-day window to cover a gap.
• If you are close to a Marketplace open enrollment or your COBRA is about to run out → time the switch, because COBRA exhaustion opens a fresh SEP but voluntarily dropping it usually does not.
• If you are 65 or older or becoming Medicare-eligible → COBRA is generally not a substitute for enrolling in Medicare on time; delaying Part B while on COBRA can create lifelong late penalties.

All dollar figures above are 2026 amounts, and statutory limits are indexed annually — confirm the current-year numbers before you rely on them. When you compare, use the same coverage year, the same family members, and your projected 2026 income for the subsidy estimate.

How this varies by state and year

Federal COBRA sets the floor, but states layer on top of it. Many states run "mini-COBRA" laws covering employers with fewer than 20 employees, and some extend continuation periods beyond the federal maximums. A handful of states run their own ACA exchanges with enrollment windows or extra state subsidies that differ from the federal HealthCare.gov platform, so your Marketplace price and deadlines can look different depending on where you live. And because the enhanced-subsidy question is being decided in 2026, the "cheaper" answer can shift within the year. Always price both options in your state, for the current plan year, at the moment you are deciding.

Who should NOT default to COBRA

COBRA is not the automatic right answer. Skip or think twice about it if: your projected 2026 income likely qualifies you for a Marketplace subsidy that beats COBRA's full price; you have not touched your deductible and do not need your specific network, so a cheaper plan carries no switching cost; or you are Medicare-eligible, where COBRA can actually cause coverage and penalty problems rather than solve them. COBRA's strength is continuity, not affordability — so if continuity is not what you need, let price and subsidy eligibility drive the decision.

Disclaimer: This article is general educational information, not insurance, tax, legal, or medical advice, and it does not recommend any specific plan. Rules, dollar amounts, and subsidy availability change — some are unresolved for 2026. Confirm current details with HealthCare.gov, your plan administrator or COBRA notice, and the U.S. Department of Labor, or consult a licensed agent or benefits advisor before deciding.