Health insurance
COBRA vs a Marketplace Plan After Job Loss: How Each Works in 2026
Losing a job usually means losing the health plan that came with it, and you generally have two main ways to stay covered: continue your old plan through COBRA, or switch to an individual plan on the ACA marketplace. COBRA keeps the exact same coverage but you pay the full price yourself, while a marketplace plan may come with premium tax credits that lower what you pay each month. This guide explains, in plain English, how each option works, what COBRA really costs, and the deadlines that decide your choice, so you can compare with your eyes open. It is independent, educational information, not a sales pitch or a government program.
Updated for 2026 · Page 1 of 1
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What COBRA Is and How It Works
COBRA is a federal law that lets many people keep the same employer health plan for a limited time after they lose their job or have their hours cut. It generally applies to employers with 20 or more employees, and it lets you continue the identical plan, with the same doctors, network, and deductible progress you already built up this year. After a job loss, coverage usually lasts up to 18 months, though certain other events can extend it further. The trade-off is cost: you are keeping employer coverage, but the employer no longer helps pay for it.
What COBRA Actually Costs
While you were employed, your company likely paid a large share of your premium and only a portion came out of your paycheck. Under COBRA you pay the entire premium yourself, both your old share and the employer's share, plus an administrative fee of up to 2 percent, so you can owe up to 102 percent of the plan's full cost. That is why COBRA often feels shockingly expensive compared with what you paid before, even though the coverage is exactly the same. There is no single price to quote, because it depends on your former plan, your family size, and your location, so ask your plan administrator for the exact monthly figure before you decide.
The Special Enrollment Period a Job Loss Triggers
Losing job-based coverage is a qualifying life event, which opens a Special Enrollment Period on the ACA marketplace outside the usual Open Enrollment window. This typically gives you a 60-day window, running from before your coverage ends to after it ends, to pick an individual plan at HealthCare.gov or your state marketplace. On the marketplace you may qualify for premium tax credits based on your household income and size, and because a job loss often lowers your income, some people find they may qualify for more help than they expected. A premium tax credit is not a check, a card, or free money; it is applied directly to your monthly premium so the amount you owe the insurer is reduced.
Comparing COBRA vs a Marketplace Plan
COBRA's strength is continuity: you keep the same plan, the same doctors, and any deductible you have already met for the year, which matters if you are mid-treatment. A marketplace plan usually means starting a new network and a fresh deductible, but it may cost far less if you qualify for a premium tax credit, and you can choose a metal tier that fits your budget. Because you can enroll in a marketplace plan during the same Special Enrollment Period, it is worth pricing both side by side before you commit. Watch the deadlines closely, since electing COBRA first and then trying to switch mid-year is limited, and simply dropping COBRA because you stopped paying does not open a new marketplace window.
Advertiser disclosure: general information only, not financial or insurance advice. Confirm current terms with a licensed insurer or agent before buying.