COBRA Continuation Coverage Explained

If you are losing job-based health insurance, COBRA lets you keep the exact plan you have now, the same doctors, the same network, the same prescriptions, for a limited time. The catch is the cost. Your employer stops paying their share, so what was coming out of your paycheck becomes the full premium, plus a small administrative fee.

For some people that is worth every penny. For others it is far more than they need to pay. This page explains how COBRA actually works so you can tell which one you are.

Reviewed and updated 1 August 2026 against current federal guidance.

Prefer to talk? Call (888) 918-4516 · Monday to Friday, 10:00 a.m. to 5:30 p.m. Eastern

The rules where you live may be different

Everything below describes federal COBRA, which applies to employers with 20 or more employees. If your former employer was smaller than that, your state’s own continuation law governs instead, and those vary a great deal. Some run 18 months, some run three, and Michigan has none at all.

See COBRA insurance rules by state →

What COBRA Is

COBRA is a federal law passed in 1985 that requires most employers with 20 or more employees to let workers and their families continue group health coverage after certain events would normally end it. It is not a plan you shop for. It is the right to stay on the plan you already have.

If your employer has fewer than 20 employees, federal COBRA does not apply. Most states have their own continuation laws, often called mini-COBRA, with different rules and timeframes. See how the rules differ by state, or your state insurance commissioner’s office can tell you what applies where you live, and the Department of Labor’s COBRA FAQ covers the federal rules in detail.

Who Qualifies

Coverage can continue after job loss or a reduction in hours, divorce or legal separation, the death of the covered employee, a dependent aging off a parent’s plan, or, for a spouse and dependents, the covered employee enrolling in Medicare.

Job loss qualifies whether you quit, were laid off, or were fired, unless the termination was for gross misconduct.

See the full list of qualifying life events →

How Long It Lasts

Job loss or reduced hours gives you 18 months of continuation coverage. The other qualifying events give dependents up to 36 months.

If someone in your household is determined disabled by Social Security within the first 60 days, an 11-month extension may be available. The premium during that extension can rise to 150 percent of the full cost.

What It Costs

Under COBRA you pay up to 102 percent of the full premium: the entire cost of the plan, plus a 2 percent administrative fee.

This is where most people are caught off guard. The amount that came out of your paycheck at work was only your share. Your employer was covering the rest, and under COBRA that portion becomes yours. Your exact cost is listed on the COBRA election notice your plan administrator sends you. See what COBRA typically costs →

Your Deadlines

60 days to elect. You have 60 days from the later of your coverage ending or receiving your election notice to elect COBRA.

45 days to pay. Once you elect, you have 45 days to make the first payment.

Coverage is retroactive. It goes back to the day your old plan ended, so there is no gap if you elect within the window.

That retroactivity is worth understanding. Some people wait, stay uninsured, and elect only if something happens. That is allowed, but it is a risk, because the full back premium comes due at once.

Not sure how much time you have left? A licensed agent can check your dates and compare your options in a few minutes, at no cost.

What COBRA Does Not Do

COBRA does not lower your costs, improve your coverage, or last indefinitely. It also does not qualify for ACA subsidies. Depending on your income and household size, a Marketplace plan may cost substantially less for comparable coverage. We are licensed to write Marketplace plans, so a licensed agent can check what you would pay and enroll you directly. See what your options cost →

Compare COBRA and Marketplace coverage side by side →

One Timing Trap Worth Knowing

Losing job-based coverage opens a 60-day Special Enrollment Period on the ACA Marketplace. If you elect COBRA and later decide it is too expensive, voluntarily dropping it does not reopen that window. You would generally wait for Open Enrollment.

However, if you let COBRA run out completely, that exhaustion does qualify you for a new Special Enrollment Period.

This catches people every year. Compare before you elect, not after.

What to do when you lose coverage →

Is COBRA Right for You?

COBRA often makes sense if

• You are in the middle of treatment

• You have doctors you cannot change

• You take prescriptions your current plan covers well

• You only need a short bridge before new coverage begins

Worth comparing alternatives if

• Your income dropped when you lost the job

• Your household is small

• Your medical needs are routine

• The premium is more than you can sustain for 18 months

Sources

The information on this page is drawn from the following federal sources. Your own plan documents govern your specific situation.

U.S. Department of Labor, FAQs on COBRA Continuation Health Coverage for Workers
U.S. Department of Labor, An Employee’s Guide to Health Benefits Under COBRA (PDF)
U.S. Department of Labor, COBRA Health Continuation Coverage
HealthCare.gov, Special Enrollment Period (glossary)

Compare before you decide

A licensed agent can compare your COBRA cost against Marketplace and private options in a few minutes, at no cost and with no obligation.

Prefer to talk? Call (888) 918-4516 · Monday to Friday, 10:00 a.m. to 5:30 p.m. Eastern

This website provides educational information about health insurance and is a solicitation for insurance. It is a non-government website operated by Prodest Insurance Group, a health insurance agency that presents health plans, which may include Affordable Care Act (ACA) plans, private health insurance, short-term medical insurance, or supplemental insurance based on the consumer's selection. Qualified ACA plans must meet or exceed the essential benefit requirements of the Affordable Care Act; non-ACA plans are not required to provide all of the essential benefit requirements contained in the Affordable Care Act. Pre-existing condition provisions, benefit availability, limitations and exclusions vary by plan type and state. You should review all plan details and product brochures before purchase. To qualify for ACA health insurance coverage outside of the open enrollment period, you must meet special enrollment requirements.

*Eligibility for Affordable Care Act (ACA) Advance Premium Tax Credit (APTC) and cost-sharing reductions is based on annual federal income thresholds, household size, and plan availability within the applicable service area. Premium rates, plan availability, and subsidy amounts vary by state and marketplace. Final eligibility and premium obligations are determined by the Health Insurance Marketplace under Internal Revenue Code Section 36B and applicable federal regulations.

COBRA My Policy is a website operated by Prodest Insurance Group, a privately owned non-government website. Prodest Insurance Group, LLC, National Producer Number 19515569. This website serves as an invitation for you to inquire about further information regarding health insurance, and submission of your contact information constitutes permission for a licensed agent of Prodest Insurance Group to contact you with further information, including complete details on cost and coverage of health insurance.