What is COBRA?
COBRA (Consolidated Omnibus Budget Reconciliation Act) lets you temporarily keep the same group health plan you had through your employer after a qualifying event — usually a layoff, termination, or reduction in work hours. The catch: you pay the full premium yourself, plus up to a 2% administrative fee. Your employer no longer subsidizes any part of the cost.
What is the ACA Marketplace?
The ACA Marketplace is where you shop for individual and family health insurance that meets Affordable Care Act standards. If losing your job drops your income, you may qualify for premium tax credits that lower your monthly payment, or for Cost-Sharing Reductions that lower your deductible and copays. You can enroll during a Special Enrollment Period triggered by losing your employer coverage.
Cost comparison: COBRA vs Marketplace
For most people, cost is the biggest deciding factor. COBRA is predictable but usually expensive; the Marketplace can be significantly cheaper depending on your income and family size.
COBRA costs
You pay 100% of the premium your employer used to subsidize, plus up to 2% in fees. For a single employee, this often ranges from $450 to $850 per month; family coverage can exceed $1,500 per month. You keep the same deductible and out-of-pocket maximum, but you cannot receive premium tax credits or other subsidies.
Marketplace costs
Premiums are based on the plan tier and your age, but subsidies are based on income. Many laid-off workers qualify for $0 or low-cost Bronze or Silver plans because their expected annual income has dropped. Silver plans may also include Cost-Sharing Reductions if your income is between 100% and 250% of the Federal Poverty Level.
Coverage flexibility
COBRA locks you into your old employer's plan for up to 18 months. You keep the same doctors, network, and benefits, but you generally cannot change plans or tiers. The Marketplace gives you more choices: you can pick Bronze, Silver, Gold, or Platinum plans from multiple carriers, add or drop family members, and switch plans during the next Open Enrollment.
The 60-day Special Enrollment Period
Losing qualifying job-based coverage triggers a 60-day Special Enrollment Period (SEP) that lets you enroll in an ACA Marketplace plan. The 60 days starts from the date your employer coverage ends or from the date you receive notice of the loss of coverage, whichever is later. Missing this window usually means waiting until the next Open Enrollment, so it pays to compare options quickly.
When COBRA usually makes sense
- You have already met your annual deductible and want to keep the same out-of-pocket progress.
- Your preferred doctors or specialists are not available in any local Marketplace plan.
- You expect a short gap and your employer subsidizes the full cost for a few months as part of severance.
- You are pregnant or in the middle of a treatment plan and switching networks would be disruptive.
When the Marketplace usually saves money
- Your household income dropped and you now qualify for premium tax credits.
- You can find a Silver plan with Cost-Sharing Reductions that beats your old employer coverage.
- You want a lower monthly premium and are willing to use a narrower network.
- You need to cover dependents with a different plan or carrier.
How to pick the right bridge coverage
Start by getting your COBRA premium quote and your expected annual income after the job change. Then compare the total yearly cost: premium × 12 plus estimated out-of-pocket spending. A Marketplace plan with a subsidy often costs less overall, but COBRA can be the better value if you have ongoing care tied to your current network. If you're unsure, a licensed Marketplace Hubs agent can run both scenarios for you in minutes.