COBRA insurance: who qualifies, what it costs and the deadlines

Who qualifies for COBRA

COBRA covers group health plans run by private-sector employers with at least 20 employees in the prior year, and plans run by state and local governments. It does not apply to federal government plans or to church plans. Many states have "mini-COBRA" laws for employers with fewer than 20 employees; ask your state insurance department.

A qualifying event must make you lose coverage. The U.S. Department of Labor lists:

• Job loss for any reason except gross misconduct, or a cut in hours
• Death of the covered employee
• The employee becoming entitled to Medicare
• Divorce or legal separation
• A child losing dependent status under the plan

The employee, a spouse or former spouse, and dependent children can each be a qualified beneficiary. Each person has their own right to elect, so family members can make different choices.

How long COBRA lasts

What COBRA costs

The plan can charge you the full premium, the part you paid plus the part your employer used to pay, plus a 2% administrative charge, for a maximum of 102% of the plan's cost. During an 11-month disability extension, it can charge up to 150%.

That's why COBRA often feels expensive: your employer was usually paying a large share while you worked. Some employers pay part or all of COBRA as part of a severance agreement, so ask HR. Your COBRA election notice lists the exact premium and due dates.

COBRA deadlines to know

1. Employer notifies the plan: within 30 days after a job loss, cut in hours, death or Medicare entitlement.
2. You notify the plan: for divorce, legal separation or a child losing dependent status. The plan sets the time limit, but it can't be less than 60 days.
3. Election notice: the plan has 14 days after it gets notice of the event to send it. The DOL says that usually means within 44 days of a job loss, cut in hours, death or Medicare entitlement, or 14 days after you report a divorce, separation or child losing dependent status.
4. Election period: at least 60 days, counted from the later of the notice date or the date coverage would end. If you elect within this window, coverage is retroactive to the date it ended.
5. First payment: due no sooner than 45 days after you elect. Miss it and the plan can end your COBRA rights.
6. Later payments: each has a grace period of at least 30 days.

Get the election notice in writing and mark the 60-day and 45-day dates on a calendar. Missing either one can end your right to COBRA.

COBRA vs a Marketplace plan

Being offered COBRA doesn't stop you from buying a Marketplace plan or getting a tax credit. HealthCare.gov says you can enroll within 60 days of losing job-based coverage, and that a Marketplace plan may cost less than COBRA if you qualify for savings based on income.

• COBRA fits when you're mid-treatment, have met much of this year's deductible, or need to keep the exact same doctors and drug list.
• A Marketplace plan fits when your income for the year qualifies for savings, or COBRA's full premium is hard to carry.
• Watch the switch rules: if you drop COBRA early by choice, outside Open Enrollment, you generally have to wait until the next Open Enrollment for a Marketplace plan. When COBRA runs out, you get a new 60-day Special Enrollment Period. HealthCare.gov says you can also switch if your former employer stops paying its share and you must pay the full cost.
• Open Enrollment for 2027 coverage runs November 1, 2026 to January 15, 2027 on HealthCare.gov. You can switch from COBRA to a Marketplace plan then for any reason. State exchanges can set different dates.

Gabriel can quote Marketplace plans for your ZIP code and household, show the price after any tax credit, and open your own application with a licensed agent in most states. You choose the plan and finish the application.

Gabriel is a membership, not health insurance, and Gabriel is not an insurer. It does not replace a health plan's protection against large medical bills.