How long does COBRA coverage last?

Federal COBRA provides 18 months of continuation coverage for most qualifying events. It can extend to 36 months for certain events like divorce or death of the covered employee. Some states also offer mini-COBRA for employees of smaller companies.

Can I get COBRA if I was fired?

Yes, you can get COBRA if you were terminated for any reason other than gross misconduct. Voluntary resignation, layoffs, and reduction in hours all qualify.

Is COBRA retroactive?

Yes. You have 60 days to elect COBRA after receiving the election notice, and coverage is retroactive to the date your employer coverage ended. This means you can wait and only elect COBRA if you need medical care during that window.

Insurance

How COBRA Insurance Works: Complete 2026 Guide

Updated September 2026 · 8 min read

Losing your job is stressful enough without worrying about health insurance. COBRA — the Consolidated Omnibus Budget Reconciliation Act — gives you the right to continue your employer health plan after you leave, but at a price that shocks most people. This guide explains exactly how COBRA works, what it costs, and when the ACA Marketplace might be a significantly better deal.

What Is COBRA?

COBRA is a federal law that requires employers with 20 or more employees to offer continuation coverage to employees (and their dependents) who lose their group health benefits due to a qualifying event. It is not a separate insurance plan — it is the right to keep the exact same employer plan you had before, at your own expense.

The key qualifying events include:

Voluntary or involuntary job loss (except for gross misconduct)
Reduction in work hours that makes you ineligible for benefits
Transition between jobs
Death of the covered employee (for dependents)
Divorce or legal separation (for dependents)
A dependent child aging out of coverage

How Much Does COBRA Cost?

Here is where the sticker shock hits. When you were employed, your employer likely paid 70-80% of your health insurance premium. Under COBRA, you pay the full premium — both your share and your former employer share — plus a 2% administrative fee.

For example, if your total plan cost was $1,800 per month (a common figure for family coverage), you would pay $1,836 per month under COBRA ($1,800 plus 2%). Compare that to the $400 per month you might have been paying as an employee, and you can see why COBRA is often called the most expensive health insurance option available.

According to KFF employer health benefits survey data, the average annual premium for employer-sponsored family coverage now exceeds $24,000. That means COBRA family coverage can easily run $2,000 or more per month.

Use our COBRA vs ACA Cost Calculator to see your exact costs side by side.

COBRA vs the ACA Marketplace

Losing employer coverage is a qualifying life event that opens a 60-day Special Enrollment Period on the ACA Marketplace (Healthcare.gov or your state exchange). This means you can shop for a Marketplace plan as an alternative to COBRA.

For many people — especially those with household income below 400% of the Federal Poverty Level — the ACA Marketplace is dramatically cheaper than COBRA, thanks to premium tax credits (subsidies). Our ACA Subsidy Estimator can show you how much help you might qualify for.

The trade-offs to consider:

COBRA keeps your exact plan — same doctors, same network, same formulary. If you are mid-treatment with a specific provider, this continuity can be worth the cost.
ACA plans may have different networks — check that your doctors and hospitals are in-network before switching.
COBRA is retroactive — you have 60 days to elect it, so you can wait and only use it if you need expensive care during that window.
ACA subsidies are based on projected annual income — if your income drops due to job loss, your subsidy could be substantial.

COBRA Timelines You Need to Know

COBRA has strict deadlines. Missing them means losing your right to coverage:

Employer notification: your employer must notify the plan administrator within 30 days of the qualifying event
Election notice: the plan must send you an election notice within 14 days after that
Your election deadline: you have 60 days from the later of the qualifying event or receiving the notice to elect COBRA
Payment deadline: your first payment is due within 45 days of electing COBRA
Coverage duration: 18 months for job loss or hour reduction; 36 months for divorce, death, or dependent aging out

The Smart COBRA Strategy

Because COBRA is retroactive and you have 60 days to elect it, many people use this strategy:

Do NOT elect COBRA immediately
Shop the ACA Marketplace during your Special Enrollment Period
If you need expensive medical care during the 60-day window, elect COBRA retroactively to cover those costs
If you stay healthy during the window, enroll in the cheaper ACA plan

This strategy gives you a free 60-day safety net while you find the most affordable long-term option.

State Mini-COBRA Laws

Federal COBRA only applies to employers with 20 or more employees. However, many states have mini-COBRA laws that extend similar rights to employees of smaller companies. The duration and rules vary by state — some offer as few as 3 months, others up to 18 months or more.

Tools to Help You Decide

COBRA vs ACA Cost Calculator — compare your costs side by side with estimated subsidies
Out-of-Pocket Cost Calculator — model your actual costs under different plan options
HSA Tax Savings Calculator — if you switch to a high-deductible plan, see how an HSA can offset costs

Sources: U.S. Department of Labor COBRA guidelines, KFF Employer Health Benefits Survey, Healthcare.gov Special Enrollment Period rules. This article is for educational purposes only and does not constitute insurance or legal advice.