After leaving a job, you can continue your employer’s health insurance through COBRA by electing coverage within 60 days of receiving your election notice. Your former employer is required to send you that notice, and once you elect, your coverage is retroactive to the day your employer plan ended, so there’s no gap. The process is mostly paperwork and deadlines, but the details matter.
Who Qualifies for COBRA
Federal COBRA applies to group health plans sponsored by private-sector employers or state and local governments with 20 or more employees. Both full-time and part-time workers count toward that threshold, with part-timers counted as a fraction based on their hours. If your employer had fewer than 20 employees, federal COBRA doesn’t apply, but many states have “mini-COBRA” laws that extend similar rights to workers at smaller companies. The rules vary by state, so check with your state’s insurance department if your employer falls below the 20-employee cutoff.
The qualifying event that triggers COBRA eligibility when you leave a job is straightforward: termination of employment for any reason other than gross misconduct, or a reduction in your hours that causes you to lose coverage. It doesn’t matter whether you quit, were laid off, or were fired. The only exception is gross misconduct, which is a high bar that courts have generally limited to things like violence, theft, or fraud.
Your spouse and dependent children who were on your plan also qualify for COBRA when you leave. They have their own set of qualifying events too, including divorce, your enrollment in Medicare, or a child aging out of dependent status.
The Election Timeline
Once you leave your job, your employer has 30 days to notify the plan administrator of the qualifying event. The plan administrator then has 14 days to send you a COBRA election notice. In practice, many employers handle both steps quickly, but the law gives them up to 44 days total.
After you receive the election notice, you have 60 days to decide whether to elect COBRA. You don’t need to decide immediately. If you elect coverage on day 59, your coverage still applies retroactively to the date you lost your employer plan. This means any medical bills you incur during that gap period will be covered once you enroll and pay your premiums. Some people use this window strategically: they wait to see if they need medical care, and only elect COBRA if they do.
How to Enroll Step by Step
The enrollment process itself is simple. Your COBRA election notice will arrive by mail and include a form. You fill out the form indicating that you’re electing coverage, choose which plan you want to continue (if your employer offered more than one), and specify which family members you want covered. Then you mail or fax the completed form back to the plan administrator by the deadline printed on the notice.
You do not need to pay anything when you submit your election form. The law gives you at least 45 days after electing COBRA to make your first premium payment. That first payment will typically cover the period from the date your employer coverage ended through the current month. After that initial payment, you’ll owe monthly premiums with a 30-day grace period each month.
If you haven’t received your election notice within a few weeks of leaving, contact your former employer’s HR department or benefits administrator directly. Delays happen, but the clock on your 60-day election window doesn’t start until you actually receive the notice.
What COBRA Costs
This is where most people get sticker shock. When you were employed, your employer likely paid 70% to 80% of your health insurance premium. Under COBRA, you pay the full premium yourself, plus a 2% administrative fee. So your monthly cost will be the entire group rate, not just the employee share you saw on your paychecks.
For context, the average employer-sponsored health plan costs over $600 per month for individual coverage and over $1,700 per month for family coverage at the full group rate. Your actual cost depends on your specific plan. The election notice will list the exact monthly premium you’d owe. While the price is steep, COBRA lets you keep the same doctors, network, and coverage levels you had while employed, which can be worth the cost if you’re mid-treatment or have a preferred provider.
How Long COBRA Lasts
For job loss or a reduction in hours, COBRA coverage lasts up to 18 months. In certain situations, that period can extend to 29 months if you or a covered family member is determined to be disabled by the Social Security Administration during the first 60 days of COBRA coverage. Spouses and dependents who qualify due to events like divorce, a covered employee’s death, or Medicare enrollment can receive up to 36 months of coverage.
COBRA ends early if you stop paying premiums, gain coverage through a new employer’s plan, or become entitled to Medicare. It also ends if your former employer stops offering a group health plan entirely.
COBRA vs. Marketplace Coverage
Losing job-based health insurance qualifies you for a Special Enrollment Period on the ACA Marketplace (HealthCare.gov or your state’s exchange). You have 60 days from the date you lose coverage to enroll, and you can actually start the process up to 60 days before your last day of employer coverage to minimize any gap.
The Marketplace is often the better financial choice. If your income has dropped because you left your job, you may qualify for premium tax credits that significantly reduce your monthly cost. COBRA premiums are fixed at the full group rate with no subsidies. A Marketplace plan with subsidies could cost a fraction of what COBRA charges, though you may need to switch doctors or networks.
One important detail: if you elect COBRA first and later want to switch to a Marketplace plan, voluntarily dropping COBRA does not trigger a new Special Enrollment Period. Your 60-day Marketplace window runs from the date you originally lost your employer coverage, not from when you drop COBRA. The exception is when your COBRA coverage is fully exhausted (you’ve used all 18 months), which does open a new enrollment window. So if you’re considering both options, compare costs and networks before your initial 60-day window closes.
When COBRA Makes the Most Sense
COBRA is most valuable in a few specific situations. If you’re in the middle of a treatment plan with a specialist who isn’t in any Marketplace network, keeping your current insurance avoids disruption. If you’ve already met your annual deductible, switching to a new plan resets it, so staying on COBRA could save you money through the end of the plan year. And if you’re starting a new job within a few months that offers health benefits, COBRA can bridge the gap without the hassle of switching plans twice.
For people who are generally healthy, between jobs for more than a few months, or eligible for Marketplace subsidies, an ACA plan is almost always cheaper. Run the numbers on HealthCare.gov before committing to COBRA. You have 60 days to decide on COBRA and 60 days to enroll in a Marketplace plan, so there’s time to compare both options side by side.