What Is COBRA Health Insurance and How Does It Work?

COBRA health insurance continues your employer plan after a qualifying event. You pay up to 102% of the full premium for up to 18 months.

Find the right health insurance options after job loss below.

Written by Mark Fitzpatrick

Updated: March 30, 2026

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Key Takeaways

COBRA lets you keep your employer-sponsored health plan after job loss, divorce or another qualifying event.

COBRA enrollees pay 100% of the full group premium plus a 2% administrative fee.

A subsidized Marketplace Silver plan may cost less than COBRA if your household income qualifies for an advance premium tax credit from the federal government.

What Is COBRA Health Insurance?

COBRA is a federal law that lets you keep your employer-sponsored group health plan after losing coverage. The Consolidated Omnibus Budget Reconciliation Act of 1985 applies to plans from private-sector employers with 20 or more employees and from state and local governments, per the U.S. Department of Labor.

COBRA doesn't create new coverage. It continues what you already had, including the same benefits, network and cost-sharing terms. You pay up to 102% of the plan's total cost, including the share your employer previously covered.

THE COBRA COST MOST ENROLLEES OVERLOOK

You can keep your exact plan through COBRA, but you pay both your share and your employer’s share of the monthly premium. Before electing, check whether your income qualifies for a premium tax credit for health insurance. The net cost difference can be several hundred dollars a month. Your 60-day COBRA election window and your Marketplace special enrollment period run at the same time.

Who Is Eligible for COBRA Coverage?

COBRA eligibility depends on two conditions: the employer plan must be subject to COBRA law and a qualifying event must occur. Covered plans are those from private-sector employers with 20 or more employees on more than 50% of typical business days in the prior year or from state and local governments.

These sections detail which events qualify and which family members can independently elect coverage.

What Qualifies as a Triggering Event?

A qualifying event is any circumstance that causes loss of employer health coverage under COBRA, such as job loss, reduced hours, divorce or the death of a covered employee. The event type determines who can enroll and how long coverage lasts.

Spouses and dependent children qualify under a broader set of triggers than employees do. These also count as qualifying life events under federal law and may open other coverage options at the same time.


Job loss (not due to gross misconduct)	Employee, spouse, dependent children
Reduction in hours of employment	Employee, spouse, dependent children
Divorce or legal separation	Spouse, dependent children
Death of the covered employee	Spouse, dependent children
Covered employee becomes entitled to Medicare	Spouse, dependent children
Loss of dependent child status (e.g., turning 26)	Dependent child

Who Can Be Covered Under COBRA?

Three beneficiary groups can elect COBRA continuation coverage: the covered employee, the employee's spouse and dependent children covered under the plan at the time of the qualifying event. Each group may elect independently, regardless of whether other family members elect.

This independence matters most when a qualifying event affects only one family member, such as divorce or a child aging out of dependent status.

The Covered Employee

The employee enrolled in the group health plan at the time of the qualifying event may elect COBRA independently. Gross misconduct by the employee forfeits this right. Covered dependents are unaffected by that forfeiture and retain their own election rights.

The Employee's Spouse

A covered spouse qualifies as an independent beneficiary and may elect COBRA regardless of whether the employee elects. Divorce, legal separation and the employee's death each independently trigger a 36-month COBRA period for the spouse.

Dependent Children

Dependent children covered under the group plan at the time of the triggering event are independent beneficiaries and may each elect COBRA independently. A child losing dependent status under the plan qualifies for a separate continuation coverage period.

How Much Does COBRA Cost in 2026?

COBRA premiums equal up to 102% of your employer plan's full cost, including both the employee and employer portions plus a 2% administrative fee. While employed, your employer covered a portion of that cost. Under COBRA, that contribution stops entirely.

Premiums under COBRA often run higher than average health insurance costs for individual and marketplace plans because employer subsidies disappear. Check your election notice or Summary Plan Description for your exact figure before committing to a plan.


COBRA individual	Enrollee pays 100% plus 2% fee
COBRA family	Enrollee pays 100% plus 2% fee
Marketplace Silver, no APTC	Enrollee pays 100%
Marketplace Silver, with APTC	After subsidy applied

MONEYGEEK EXPERT TIP

If a Social Security Administration disability determination applies, COBRA premiums for months 19 through 29 can reach 150% of the plan's full cost, per the U.S. Department of Labor. This 11-month extension requires the SSA to determine disability before day 60 of COBRA coverage. The beneficiary must notify the plan within 60 days of the determination.

How Long Does COBRA Coverage Last?

COBRA coverage lasts 18 months for job loss or a reduction in hours, per the U.S. Department of Labor. Divorce, the covered employee's death, Medicare entitlement and a dependent child's loss of dependent status entitle those qualified beneficiaries to 36 months instead. A plan can offer longer periods than the law requires, but it can't offer less than the federal minimum.


Job loss or reduction in hours	Employee, spouse, dependent children	18 months
Divorce or legal separation	Spouse, dependent children	36 months
Death of covered employee	Spouse, dependent children	36 months
Covered employee becomes entitled to Medicare	Spouse, dependent children	36 months
Loss of dependent child status	Dependent child	36 months
Second qualifying event during existing COBRA period	Spouse, dependent children	Up to 36 months total
SSA disability determination (before day 60 of COBRA)	All qualified beneficiaries in the family	Up to 29 months

HAVE ANOTHER QUALIFYING EVENT?

A second qualifying event during an existing 18-month COBRA period, such as divorce or the covered employee's death, can extend coverage to 36 months total, per the U.S. Department of Labor. Notify your plan administrator as soon as a second qualifying event occurs. You have at least 60 days from the event to give notice.

What Does COBRA Cover?

COBRA continuation coverage is identical to the employer plan you had before your qualifying event. The same provider network, drug formulary, health insurance deductible, out-of-pocket maximum and benefits all carry over. If your employer plan covered dental and vision, COBRA continues both.

Any plan changes the employer makes for active employees during open enrollment apply to COBRA participants as well. No new benefits are added and none can be removed.

Medical and Hospitalization Services

All inpatient and outpatient services covered under the prior employer plan continue unchanged under COBRA, including the same in-network providers, copays and annual deductible.

Prescription Drug Coverage

COBRA preserves the existing formulary and pharmacy cost-sharing tiers. Enrollees retain the same drug pricing and tier structure they had as active employees.

Mental Health and Substance Use Services

COBRA covers mental health benefits at the same level as the prior employer plan, consistent with ACA mental health parity requirements.

Dental and Vision If Part of the Group Plan

If dental or vision coverage was included within the employer group health plan subject to COBRA, it continues. Stand-alone dental or vision plans require separate COBRA elections.

Preventive Care at No Cost

ACA-mandated preventive services that were covered at no cost under the prior plan remain at no cost under COBRA, provided the enrollee uses in-network providers.

COBRA coverage mirrors the group health plan in effect at the time of the qualifying event. Benefits may change at annual plan renewal.

How Do You Sign Up for COBRA?

COBRA enrollment begins when your plan administrator sends you an election notice, which must arrive within 14 days of the qualifying event, per the U.S. Department of Labor. The employer must notify the plan administrator within 30 days of a qualifying event it controls.

You then have 60 days from the notice date to decide. During that window, you can also look at health coverage options after open enrollment on the marketplace if COBRA premiums are too high.

1
Receive Your COBRA Election Notice
The plan administrator must send a COBRA election notice within 14 days of learning about the qualifying event. If the employer acts as its own plan administrator, the notice is due within 44 days. The notice contains the full monthly premium, election deadline and payment instructions.
2
Elect Coverage Within 60 Days
You have 60 days from the date of the election notice or the date coverage ends, whichever is later, to elect COBRA, per DOL rules. Missing this deadline permanently forfeits your right to continuation coverage for that qualifying event.
3
Make Your First Premium Payment Within 45 Days
After electing, you have 45 days to submit the first payment, per DOL rules. Coverage is retroactive to the qualifying event date once payment clears, so claims from the election window period are covered once payment is received.
4
Pay Monthly Premiums on Time
Subsequent premiums are due on the first day of each coverage month with a 30-day grace period. Missing the grace period terminates COBRA coverage permanently.
5
Notify the Plan Administrator of Any Status Changes
If you gain coverage under another group health plan or become entitled to Medicare during your COBRA period, notify the plan administrator promptly. Both events terminate COBRA early under DOL rules.

Is COBRA Worth It? COBRA vs. Other Health Insurance Options

COBRA makes financial sense in two situations: mid-treatment continuity with in-network providers, or a coverage gap of three months or less before new employer coverage starts.

Alternatives to COBRA insurance include Marketplace plans, Medicaid, spousal coverage and short-term health plans, each with distinct cost and coverage trade-offs.


Mid-treatment with a specialist in your current network	COBRA	Switching resets your deductible and may move your provider out of network mid-care.
Already met 50% or more of your annual deductible	COBRA	A plan change resets the deductible to zero. COBRA may save more than the reset costs.
Income below 400% of FPL	Marketplace Silver plan with APTC	An advance premium tax credit can reduce the net Marketplace premium below the full COBRA cost.
Income below 138% of FPL in an expansion state	Medicaid	Medicaid coverage is free or near-free. No COBRA math applies.
Eligible for a spouse's or partner's employer plan	Spouse's employer plan	Employer-sponsored plans cost employees 20-30% of the full premium, far less than COBRA's 102%.
Healthy, needs coverage 1 to 3 months, no APTC eligibility	Short-term health plan	Short-term plans cost less than COBRA but do not cover pre-existing conditions and are not ACA-compliant.

APTC eligibility and Marketplace Silver costs are based on 2026 CMS data. Short-term plans are not ACA-compliant and do not cover pre-existing conditions.

ACA marketplace plans, Medicaid and short-term health insurance each offer different coverage levels and eligibility rules worth comparing. People who retire before 65 and aren't yet eligible for Medicare often have the longest coverage gaps, and health insurance for early retirees through the ACA marketplace or Medicaid may cost less than COBRA.

COBRA Health Insurance: Bottom Line

COBRA continuation coverage preserves your employer plan, network and benefits after a qualifying event, but you'll pay 102% of the full group premium. If your income qualifies for an advance premium tax credit, compare the net Marketplace cost before you elect.

Your 60-day COBRA window and the Marketplace special enrollment period run at the same time, so you don't have to decide immediately.

COBRA Insurance: FAQ

We've answered the most frequently asked questions about COBRA health insurance below, covering eligibility, cost and enrollment deadlines:

Can I enroll in COBRA after the 60-day window closes?

The 60-day COBRA election deadline is a federal floor under DOL rules. Once it passes, your right to continuation coverage for that qualifying event is permanently forfeited. If your Marketplace special enrollment period is still open, use it to enroll through HealthCare.gov or your state-based exchange.

Does losing job-based coverage open a Marketplace special enrollment period?

Losing employer-sponsored coverage is a qualifying life event that opens a 60-day special enrollment period on the federal Marketplace and most state-based exchanges. This period runs at the same time as your COBRA election window, giving you time to compare both options before committing to either.

Can I switch from COBRA to a Marketplace plan before my 18 months are up?

You can only enroll in a Marketplace plan mid-year if you have a qualifying life event. Voluntarily dropping COBRA does not create one. Without a qualifying event, you'd need to wait for annual open enrollment, which runs November 1 through January 15 on the federal Marketplace.

Does COBRA cover dental and vision benefits?

COBRA extends to dental and vision only if those benefits were included within the same employer group health plan subject to COBRA. Stand-alone dental or vision plans administered separately may not fall under federal COBRA rules. Your election notice confirms which plans are included.

What happens to COBRA if my former employer goes out of business?

COBRA ends if the employer terminates its group health plan entirely, including when a business closes. An employer terminating its group plan mid-COBRA period qualifies as a life event that opens a new Marketplace special enrollment period, giving you 60 days to find alternative coverage.

Can my dependents elect COBRA independently if I don't elect it?

Each qualified beneficiary, including the employee, spouse and dependent children, may elect COBRA independently under DOL rules. A spouse or dependent child can elect coverage even if the former employee does not. Dependents eligible for the 36-month period may also elect on a timeline independent of the employee's 18-month period.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. He has analyzed the insurance market for over five years, conducting original research for insurance shoppers. His insights have been featured in CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

He writes about economics and insurance, breaking down complex topics so people know what they're buying.

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