COBRA alternatives: what to compare before you elect coverage

COBRA keeps your current plan, usually at full cost

Federal COBRA generally applies to employers with 20 or more employees and lets you continue the same group health coverage for a limited time. You usually pay the entire premium plus a small administrative fee, which is why many people compare other options before they elect it.

The Department of Labor says you have at least 60 days to decide, starting on the later of the date the election notice is provided or the date you would otherwise lose coverage. If you elect COBRA, you then have 45 days to make the first payment. Each qualified beneficiary can make a separate election.

Official alternatives the Department of Labor and HealthCare.gov list

Before you elect COBRA, the Department of Labor and HealthCare.gov ask you to consider:

• A new employer’s group plan, or a spouse’s or parent’s plan (a parent’s plan may be available if you are under 26). Losing other coverage can open a group-plan special enrollment period; enrollment is often requested within 30 days.
• A Health Insurance Marketplace plan in your state. You may qualify for premium tax credits or cost-sharing reductions based on income. HealthCare.gov says you must select a Marketplace plan within 60 days of losing job-based coverage, and you can apply even if you are eligible for COBRA.
• Medicaid or the Children’s Health Insurance Program (CHIP), if you are eligible. You can apply any time, and coverage can start promptly if you qualify.
• Medicare, if you are eligible (generally age 65 or older, or certain younger people with disabilities or end-stage renal disease).

Timing matters if you need coverage immediately

Marketplace coverage after a job loss generally starts the first day of the next month, not the day your job-based plan ends. The Department of Labor notes that COBRA may help bridge a short gap until Marketplace coverage starts. If you later lose COBRA because it expires, that can open a new Marketplace Special Enrollment Period. Voluntarily canceling COBRA usually does not.

Private, off-exchange plans

Some people also compare private major-medical or short-term plans with their COBRA quote. Those products are not the same as keeping your employer plan, and short-term plans are not comprehensive coverage. A licensed agent can put your COBRA premium next to Marketplace and private options and tell you if the Marketplace would cost you less. This site is not a government website and does not sell insurance.

Common questions

Related guides

• Health insurance between jobs
• Health insurance outside Open Enrollment
• Health insurance for early retirees under 65

Looking for a call about cobra alternatives? Read the plan page or use the form on this page.