The Decision You Need to Make in 60 Days
When you lose employer-sponsored health insurance — through a layoff, resignation, or reduction in hours — you have two main options: elect COBRA continuation coverage or enroll in an ACA marketplace plan through a Special Enrollment Period. You have exactly 60 days from the date coverage ends to act on either option.
Most people default to COBRA because it is familiar and requires no new research. That is often the wrong call. For many people who have lost a job, a marketplace plan with an income-based subsidy is dramatically cheaper than COBRA. For others — particularly those with high incomes or ongoing medical needs — COBRA is the right choice. The answer depends on your specific situation.
What COBRA Actually Costs
COBRA lets you keep your exact employer plan — same network, same doctors, same prescription coverage — but you now pay the full premium. Your employer was likely covering 70-80% of the premium while you worked. On COBRA, that subsidy disappears and you pay everything, plus a 2% administrative fee.
The result is often a shocking number. Examples of typical 2026 COBRA premiums:
- Single coverage: $550 to $850 per month, depending on employer, plan, and region
- Employee + spouse: $1,200 to $1,700 per month
- Family coverage: $1,700 to $2,400 per month
These are rough averages. Your actual COBRA premium is listed in the election notice your employer is required to send within 14 days of the qualifying event. That number is the starting point for the comparison.
COBRA coverage lasts up to 18 months in most cases (36 months for dependents in certain circumstances). You can cancel COBRA at any time, but switching to a marketplace plan after electing COBRA requires waiting for Open Enrollment unless another qualifying event occurs.
What a Marketplace Plan Would Cost at Your Income
ACA marketplace premiums are adjusted based on your household income. If your income after job loss is lower than it was while employed, your subsidy eligibility changes — often dramatically. The subsidy is calculated on your projected annual income for the coverage year, not your income while you were working.
The income cutoffs that matter most in 2026:
- Below 138% FPL ($21,597 for a single adult): Medicaid in expansion states. Zero premium, comprehensive coverage.
- 138% to 150% FPL ($21,597 to $23,475): ACA benchmark Silver plan available for $0/month after subsidy in most states.
- 150% to 200% FPL ($23,475 to $31,300): Very strong subsidies. Benchmark Silver plan typically costs $0 to $60/month after subsidy.
- 200% to 300% FPL ($31,300 to $46,950): Meaningful subsidies. Benchmark Silver plan typically costs $60 to $200/month after subsidy.
- 300% to 400% FPL ($46,950 to $62,600): Subsidies still apply. Benchmark Silver plan typically costs $200 to $450/month after subsidy.
- Above 400% FPL: Enhanced subsidies cap benchmark Silver at 8.5% of income — roughly $444 to $708/month for incomes between $62,600 and $100,000.
The key insight: if you lost your job and your income drops significantly, your subsidy eligibility can jump dramatically. A household earning $90,000 while employed might have had no subsidy; the same household projecting $45,000 in income after a job loss qualifies for a substantial credit.
Side-by-Side Comparison: Three Real Scenarios
Scenario 1: Single adult, projected income $38,000 after job loss
At $38,000 — 243% of the Federal Poverty Level — this person qualifies for ACA subsidies. The benchmark Silver plan after subsidy runs approximately $130 to $200 per month depending on the state and market area. COBRA for single coverage from a mid-size employer averages $650 per month. Marketplace saves roughly $450 to $520 per month.
Scenario 2: Family of four, projected income $75,000 after job loss
At $75,000 for a family of four — 242% FPL — this family qualifies for significant subsidies. A marketplace Silver plan for the family runs approximately $400 to $700 per month after subsidy. Family COBRA from most mid-size employers runs $1,800 to $2,200 per month. Marketplace saves $1,100 to $1,800 per month.
Scenario 3: Single adult, projected income $120,000 after job loss (consulting, contract work)
At $120,000 — 767% FPL — subsidies still apply under current enhanced rules, capping the benchmark Silver plan at 8.5% of income ($850/month). COBRA for single coverage may run $650 to $750/month. COBRA may actually be cheaper here, and preserves the exact same network and plan the person is already using. At high incomes where the margin is small, network continuity often tips the decision toward COBRA.
When COBRA Is the Right Choice
COBRA is worth choosing over a marketplace plan in specific circumstances:
- You are mid-treatment. If you are in active treatment for a condition — chemotherapy, surgery recovery, an ongoing specialist relationship — changing plans and networks mid-year is risky. COBRA keeps your exact plan and providers in place.
- Your income is high enough that the premium difference is small. At higher incomes where subsidies are limited, COBRA and marketplace premiums can be comparable. If COBRA is only $100 to $200 more per month, the network continuity and no-switching-hassle may be worth it.
- You expect to return to employer coverage soon. If you have a job offer starting in 45 days, a short COBRA stint may be simpler than enrolling in a marketplace plan and then disenrolling. COBRA can be cancelled any time.
- Your employer plan has an unusually good network or benefits. Some employer plans — particularly those from large companies or unions — have networks or prescription formularies that marketplace plans in your area cannot match.
When a Marketplace Plan Is the Right Choice
The marketplace is almost always better in these situations:
- Your income dropped significantly with the job loss. This is the biggest factor. If your projected income for the year is now in subsidy range, the marketplace plan will almost certainly be cheaper.
- You are not mid-treatment and can change providers. If you have no urgent ongoing care, starting fresh with a marketplace plan and its network is a reasonable trade for the premium savings.
- You plan to stay without employer coverage for more than a few months. COBRA lasts up to 18 months but is priced for the short term. A marketplace plan is designed for ongoing self-purchased coverage and includes subsidies accordingly.
- You are becoming self-employed. The self-employment health insurance deduction makes marketplace premiums even more cost-effective by reducing your adjusted gross income, which in turn can increase your subsidy.
The 60-Day Rule: Do Not Wait Too Long
Both your COBRA election window and your marketplace Special Enrollment Period run for 60 days from the date coverage ends. They run simultaneously, not sequentially.
You do not have to decide on day one. You can take a few weeks to get your COBRA premium notice, estimate your marketplace options, and make the comparison. But the 60-day clock is hard. After day 60, the marketplace SEP closes and COBRA election becomes unavailable. If you miss both, you are uninsured until the next Open Enrollment.
One tactical note: if you elect COBRA and later decide you want the marketplace instead, you cannot switch freely. You must wait for Open Enrollment or another qualifying life event. Voluntarily dropping COBRA does not trigger an SEP. Make the comparison before electing COBRA, not after.