COBRA vs Your Alternatives
When you lose job-based health insurance, COBRA lets you keep the same plan, but you usually pay the full cost yourself. It is one of several paths. Here is how COBRA compares with a Marketplace plan, short-term insurance, health sharing and Direct Primary Care, so you can choose with the deadlines and trade-offs in view.
| Option | What you pay | What it is | Often fits | Watch for |
|---|---|---|---|---|
| COBRA | Up to 102% of the full group premium (your share plus your former employer's share, plus a 2% fee) | The same group health insurance you had at work, continued for a limited time | People in the middle of treatment, people who have already met their deductible, short gaps before a new job | 60-day election window; usually up to 18 months; you pay the full cost |
| ACA Marketplace plan | Monthly premium; savings based on your estimated income can lower it | Individual health insurance that includes essential health benefits and can't turn you down or charge more based on your health | Most people who want ongoing, regulated insurance, especially if their income qualifies for savings | Enroll within 60 days of losing job-based coverage, or wait for open enrollment |
| Short-term health insurance | Monthly premium; plans are usually medically underwritten | Temporary insurance that does not have to follow ACA rules | Healthy people who need a brief bridge and understand the limits | Can exclude pre-existing conditions; not minimum essential coverage; rules and availability vary by state |
| Health sharing (not insurance) | Monthly contribution, plus your Initial Unshared Amount (IUA) for each medical need | A membership community that shares eligible costs under its own guidelines | Generally healthy people paying full price who are comfortable reading program guidelines | Sharing is not guaranteed; waiting periods for pre-existing conditions; not available in every state |
| DPC plus a layer for large events | Flat monthly DPC membership (about $99 per member on average) plus the cost of the second layer | DPC handles primary care; Marketplace insurance or health sharing handles hospital stays, surgery and specialists | People who want easy, direct access to a primary care doctor | DPC is not insurance; you still need a separate layer for large medical events |
What COBRA costs and how the deadlines work
COBRA lets you and your family keep your employer’s group health plan after a job loss, a cut in hours or another qualifying event. It generally applies to employers with 20 or more employees [1]. Because your former employer usually stops paying its share, the plan can charge up to 102% of the full cost: the amount you paid, the amount your employer paid, and a 2% administrative fee [1].
That change can be large. In 2025 the average annual premium for employer coverage was $9,325 for single coverage and $26,993 for family coverage, while the average worker contributed $1,440 and $6,850 a year [2]. At 102%, those averages work out to roughly $793 a month for single coverage and $2,294 a month for a family, compared with about $120 and $571 a month the average worker was paying through payroll. Your plan’s numbers will differ, so check your election notice.
The key COBRA rules:
- Election window. You have at least 60 days to choose COBRA, starting from the later of the date you receive the election notice or the date your coverage would end [1][3].
- Retroactive coverage. If you elect within that window, COBRA is retroactive to the day you lost your job-based plan [4]. You then have at least 45 days after electing to make your first payment [1].
- How long it lasts. COBRA usually lasts up to 18 months, and certain life events can extend it to 36 months [3].
When COBRA can make sense
COBRA is often worth a close look if you are in the middle of treatment with doctors in your current network, if you or a family member has already met this year’s deductible, or if you expect a new employer plan to start within a few weeks. Keeping the same plan avoids restarting a deductible or changing doctors partway through the year.
The Marketplace alternative
Losing job-based coverage opens a Special Enrollment Period: you can enroll in a Marketplace plan within 60 days of losing it [5]. Being offered COBRA does not make you ineligible for Marketplace coverage or for a tax credit [1], and Marketplace plans may cost less than COBRA, especially if you qualify for savings based on your income [5]. Marketplace plans can’t deny you coverage or raise your rates based only on your health [6].
Watch the timing. If you choose to end COBRA early, you generally have to wait until the next open enrollment to get Marketplace coverage [5]. For 2027 coverage, open enrollment runs November 1, 2026 to January 15, 2027, and December 15 is the deadline for coverage starting January 1 [7]. To see Marketplace prices for your household, try our Quick Rate Estimator, which takes under 60 seconds.
Short-term health insurance
Short-term plans are insurance, but the ACA exempts them from its rules on medical underwriting, pre-existing condition exclusions, annual and lifetime limits and essential health benefits, and they are not minimum essential coverage [8]. State laws also shape whether these plans are sold and how long they can last [8]. They can work as a short bridge for healthy people, but read the exclusions carefully. Our article on short-term health coverage after job loss goes deeper.
Health sharing and Direct Primary Care
Health sharing programs are membership communities where people make a monthly contribution and share one another’s eligible medical expenses. Health care sharing ministries serve at least 1.7 million people, but they are not insurance, are not regulated by state insurance commissioners, and do not count as minimum essential coverage [9]. Programs differ in their Initial Unshared Amount (IUA), waiting periods for pre-existing conditions, whether members must agree to a statement of belief, and sharing limits. Learn more on our health sharing page or in Health Share vs Traditional Insurance.
Direct Primary Care is a membership with a primary care practice for a flat monthly fee, about $99 per member per month on average nationally [10]. It is not insurance, so it is paired with Marketplace insurance or health sharing for hospital stays, surgery and specialists. See Direct Primary Care and our hybrid models comparison.
How to decide inside the 60-day window
- Write down your dates: when your job-based coverage ends and when your COBRA election notice arrived.
- Price COBRA from your election notice, for the household members who need it.
- Price a Marketplace plan with the Quick Rate Estimator, and check whether your doctors and prescriptions are in network.
- List upcoming care, such as ongoing treatment, a planned surgery or a pregnancy, since that often decides the answer.
- Talk it through. Our job transitions and COBRA alternatives page explains more, or you can book a consultation with an independent advisor.
REFERENCES
[1] U.S. Department of Labor. “An Employee’s Guide to Health Benefits Under COBRA.” Employee Benefits Security Administration, September 2022. https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/an-employees-guide-health-benefits-under-cobra-2022.pdf
[2] KFF. “2025 Employer Health Benefits Survey.” KFF, October 2025. https://www.kff.org/health-costs/2025-employer-health-benefits-survey/
[3] U.S. Department of Labor. “COBRA Continuation Coverage.” U.S. Department of Labor, 2026. https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra
[4] U.S. Department of Labor. “FAQs on COBRA Continuation Health Coverage for Workers.” U.S. Department of Labor, 2026. https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/cobra-continuation-health-coverage-workers
[5] HealthCare.gov. “COBRA Coverage When You’re Unemployed.” U.S. Centers for Medicare & Medicaid Services, 2026. https://www.healthcare.gov/unemployed/cobra-coverage/
[6] HealthCare.gov. “Marketplace Health Plans Cover Pre-existing Conditions.” U.S. Centers for Medicare & Medicaid Services, 2026. https://www.healthcare.gov/coverage/pre-existing-conditions/
[7] HealthCare.gov. “Dates and Deadlines for 2027 Health Insurance.” U.S. Centers for Medicare & Medicaid Services, 2026. https://www.healthcare.gov/quick-guide/dates-and-deadlines/
[8] Pollitz, K., et al. “Understanding Short-Term Limited Duration Health Insurance.” KFF, April 2018. https://www.kff.org/affordable-care-act/understanding-short-term-limited-duration-health-insurance/
[9] healthinsurance.org. “What is a health care sharing ministry?” healthinsurance.org, April 2026. https://www.healthinsurance.org/glossary/health-care-sharing-ministry/
[10] Direct Primary Care Alliance. “State of Direct Primary Care 2026.” DPC Alliance, July 2026. https://dpcnews.com/wp-content/uploads/2026/07/State_of_DPC_FINAL2026.pdf
Frequently asked questions
How much does COBRA cost?
Your former employer's plan can charge up to 102% of the full cost of coverage: the share you paid, the share your employer paid, and a 2% administrative fee. Based on 2025 national averages for employer plans, that works out to roughly $793 a month for single coverage and $2,294 a month for family coverage. Your election notice lists your actual cost.
How long do I have to decide on COBRA?
You have at least 60 days to elect COBRA, starting from the later of the date you receive the election notice or the date your job-based coverage ends. If you elect within that window, COBRA is retroactive to the day your job-based plan ended.
Can I drop COBRA later and switch to a Marketplace plan?
Only at certain times. Voluntarily dropping COBRA outside open enrollment does not open a Special Enrollment Period, so you would generally wait for the next open enrollment. When COBRA runs out on its own, you have 60 days to enroll in a Marketplace plan.
Is health sharing a replacement for COBRA?
Health sharing is not insurance and does not count as minimum essential coverage. Some generally healthy people choose it after a job change, but sharing is not guaranteed and pre-existing conditions often have waiting periods. It is not available in every state, so ask an advisor about options where you live.
When is ACA open enrollment for 2027 coverage?
Marketplace open enrollment for 2027 coverage runs November 1, 2026 to January 15, 2027. Enroll by December 15 for coverage that starts January 1. Losing job-based coverage also lets you enroll outside that window within 60 days.
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