What Is COBRA?
COBRA (Consolidated Omnibus Budget Reconciliation Act) gives you the right to continue your employer-sponsored health insurance for a limited time after you leave a job, lose hours, or experience another qualifying event. The coverage is identical to what you had—same network, same plan—but you pay the full premium instead of just your employee share.
Who Qualifies for COBRA?
COBRA applies to employers with 20 or more employees. If your employer has fewer than 20 employees, check your state's "mini-COBRA" law—most states have similar continuation rules for smaller groups.
| Qualifying Event | Who's Eligible | Max Duration |
|---|---|---|
| Voluntary or involuntary job loss (not gross misconduct) | Employee + dependents | 18 months |
| Reduction in hours (below benefit eligibility) | Employee + dependents | 18 months |
| Divorce or legal separation | Ex-spouse + children | 36 months |
| Employee becomes eligible for Medicare | Spouse + dependents | 36 months |
| Dependent child ages out (loses dependent status) | Dependent child | 36 months |
| Employee death | Surviving spouse + dependents | 36 months |
What Does COBRA Cost?
The COBRA premium = your former employer's full cost of the plan + up to 2% administrative fee. Most employees only paid 20–30% of the actual premium while employed—on COBRA, you pay 100% + 2%.
| Coverage Type | Avg Employer Plan Cost | Your COBRA Premium |
|---|---|---|
| Individual | ~$700/month | ~$714/month |
| Employee + Spouse | ~$1,500/month | ~$1,530/month |
| Family | ~$2,000/month | ~$2,040/month |
When COBRA Actually Makes Sense
- You've met your deductible. If you've already spent $3,000–$7,000 toward your deductible, your COBRA plan is essentially free care for the rest of the year.
- You're mid-treatment. Changing plans mid-treatment (surgery, chemotherapy, ongoing specialist care) risks network disruption and re-authorizations. COBRA preserves continuity.
- You have specific in-network providers. A specialist, fertility clinic, or rare disease center may be in your current plan but not available ACA plans in your area.
- Short gap before new employer coverage. If you start a new job in 6–8 weeks with benefits, COBRA may be worth the premium for that short bridge period.
COBRA Enrollment Timeline
| Step | Deadline |
|---|---|
| Employer notifies plan administrator of qualifying event | 30 days |
| Plan administrator sends COBRA election notice to you | 14 days after notification |
| You elect COBRA coverage | 60 days from notice (or coverage end, whichever is later) |
| You pay first premium | 45 days from election |
Coverage is retroactive to the day employer coverage ended, so you can wait until you actually need care before paying—as long as you pay within the 45-day window after electing.