COBRA alternatives: what to compare before you pay full price
COBRA lets you keep your employer's health plan after you leave, but you pay the whole premium yourself, often plus a 2% admin fee. For many people that's the first time they see what the plan really costs, and it's frequently hundreds or thousands of dollars a month. Before you sign the election form, it's worth fifteen minutes to see what else you qualify for.
The alternatives to COBRA
- ACA Marketplace plan. Losing job-based coverage opens a 60-day Special Enrollment Period. If your income drops after leaving the job, your premium tax credit may cover a large share of the premium. How Marketplace plans work.
- A spouse's or partner's employer plan. Losing your coverage is usually a qualifying event to join their plan, typically within 30 days.
- Private plans outside the Marketplace. For healthy people who won't get much of a subsidy, a medically underwritten private plan can cost far less than COBRA. These plans aren't ACA plans and can exclude pre-existing conditions, so we read the details together. Private plans explained.
- Medicaid or CHIP. If your household income drops low enough, you or your children may qualify, with no enrollment window at all. Medicaid guidance.
When COBRA is actually the right call
COBRA isn't always the wrong answer. It can make sense if you've already met most of this year's deductible, you're in the middle of treatment with doctors you can't risk losing, or you only need a few weeks of coverage before a new job's plan starts. I'll tell you plainly when keeping COBRA is the smarter move.
Don't let deadlines run out while you decide. The Marketplace special enrollment window is generally 60 days from the date your job coverage ends. Voluntarily dropping COBRA mid-year does not by itself open a new enrollment window outside Open Enrollment.
COBRA questions
Is there anything cheaper than COBRA?
Usually, yes. Most people leaving a job qualify for a Marketplace plan with a premium tax credit based on their expected income, and healthy applicants may qualify for private plans that cost less than COBRA. The right answer depends on your income, your health and your doctors.
Can I switch from COBRA to a Marketplace plan?
Yes, during Open Enrollment, or when your COBRA coverage runs out. Dropping COBRA voluntarily outside those times generally doesn't qualify you for special enrollment, which is why it pays to compare before you elect it.
How long do I have to decide?
You generally have 60 days from your COBRA election notice to elect it, and coverage is retroactive if you do. The Marketplace window is 60 days from losing coverage. Comparing early keeps every option open.