The short answer
COBRA lets you keep the group health plan you had through a job after you lose it, at your own expense. It applies to most private employers with 20 or more employees and to state and local governments, and some states extend similar rights to smaller employers. You have 60 days to elect it, counted from the later of the date coverage ends or the date the notice is sent, and 45 days after electing to make the first payment, which covers coverage back to the day it ended. It generally lasts 18 months after a job loss or reduced hours, and 36 months after divorce, a death or a child aging out. It costs up to 102 percent of the full premium. A Marketplace plan with premium tax credits, a spouse's employer plan or Medicaid are the main alternatives, and each has its own window.
What COBRA is, and who can use it
The Consolidated Omnibus Budget Reconciliation Act, known as COBRA, gives people who lose job-based health coverage the right to continue it, usually for a limited time. It is a continuation of the same plan, with the same doctors, benefits and network, not a new policy. You pay for it yourself, because the employer no longer contributes.
The right covers the employee, a spouse and dependent children who were on the plan. It applies to group health plans of private employers with 20 or more employees on a typical business day in the year before, and to plans of state and local governments. Federal employees have a separate continuation right. Many states have laws, often called mini-COBRA, that give similar rights to people at smaller employers, so ask the plan administrator if your employer has fewer than 20 employees.
The qualifying events are a job loss for any reason other than gross misconduct, a cut in hours that ends coverage, divorce or legal separation, the covered employee's death, and a child aging off the parent's plan. A person who loses coverage for one of those reasons is called a qualified beneficiary, and each family member has their own right to elect.
The three deadlines
Swipe sideways to see the whole table.
| Step | Deadline | What happens |
|---|---|---|
| Notice of your rights | Up to 44 days when the employer runs the plan, or longer in some cases | The employer tells the plan administrator within 30 days, and the administrator sends you an election notice |
| Electing COBRA | 60 days from the later of the coverage end date or the notice date | You decide. Waiving does not end your right until the 60 days run out |
| First payment | 45 days after you elect | It covers every month back to the day coverage ended, so it can be large |
| Later payments | Monthly, with a grace period of 30 days | A missed payment can end coverage for good |
The 60-day window is the one people miss, because the election notice often arrives during a stressful month. The second and third deadlines are different. If you elect on day 59, your first payment is due 45 days later, so you may have more than three months from the date coverage ended before the first check is due.
Coverage is retroactive. If you elect and pay, the plan covers the whole period from the day the old coverage ended, which means you could wait to see whether you need it. We say more about that below.
What it costs, and how long it lasts
You can be charged up to 102 percent of the plan's full cost: the share you used to pay, the share your employer paid, and a 2 percent administrative fee. For months 19 through 29 of a disability extension, the plan can charge up to 150 percent. Because the employer's share is gone, the premium is often several times what came out of your paycheck, and the notice states the exact amount. If you signed a separation agreement, read it for any promise to pay part of the premium, because severance packages sometimes include a few months of COBRA.
How long COBRA lasts depends on what ended your coverage:
- 18 months after a job loss or a cut in hours.
- 29 months if Social Security finds that you or a family member was disabled before the 60th day of COBRA coverage and you tell the plan in time. Our guide to Medicare before 65 covers the disability side.
- 36 months after a divorce, a death or a child losing dependent status, or when a second qualifying event happens during the first 18 months.
One advantage that rarely appears in the comparison is your deductible. If you have already paid part of your yearly deductible and out-of-pocket limit, COBRA keeps that progress. A new plan starts at zero, which can matter a lot in a year with surgery or a pregnancy.
COBRA against the alternatives
Swipe sideways to see the whole table.
| Option | Typical cost | Window to join | Keeps your doctors and plan? |
|---|---|---|---|
| COBRA | Up to 102% of the full premium, with no employer share | 60 days to elect, retroactive to the loss | Yes, the same plan |
| Marketplace plan | Based on income, with premium tax credits for many households | 60 days after losing coverage, or open enrollment | Not necessarily; networks differ |
| Spouse's or partner's employer plan | Usually a payroll share for the employee and dependent | Often 30 or 60 days after the loss, set by the plan | Not necessarily |
| Medicaid or CHIP | Free or low cost if your income qualifies | Year-round | Depends on the plan |
Eligibility for COBRA does not stop you from buying a Marketplace plan, but you cannot get premium tax credits for months when you are enrolled in COBRA. If you pass up COBRA, you have a 60-day special enrollment period after the loss. If you elect it and later drop it by choice, you generally have to wait for open enrollment, although a special enrollment period opens when COBRA runs out or the employer ends the plan. Our guide to special enrollment periods explains the rules, and our guide to Marketplace subsidies shows how much help is available.
If the Marketplace, Medicaid or a spouse's plan is cheaper, the main question is whether the doctors and hospitals you use are in the new network. If you are in the middle of treatment, or near the end of a year, COBRA's continuity can be worth the extra cost for a few months. Ask the plan administrator for the exact monthly price early, because it is often the number that settles the choice.
Using the 60 days well
Because election is retroactive, the window works like a short option. You do not have to pay until you elect, and you do not have to elect until the end of the 60 days. A common approach is to line up a Marketplace plan or a spouse's plan for the future, and keep the COBRA election open as a safety net in case a large medical bill arrives in the gap.
This is not risk-free. Providers may be told that your coverage is pending and may ask you to pay at the visit, and claims are paid only after you elect and pay. If you are going to need care, do not rely on the gap. Ask the plan administrator in writing how it handles claims during the election period.
Example (hypothetical): a layoff on March 31
A man is laid off on March 31 and gets the election notice on April 8. He has until about June 7 to elect. He signs up for a Marketplace plan that starts May 1 and does not elect COBRA. In April he has no coverage and is careful. Had he broken a leg that month, he could have elected COBRA by June 7, paid for April alone within 45 days, and had the bill covered back to April 1. COBRA lets you pay for only the months you want.
When COBRA ends early
- You miss a premium payment past the grace period.
- Your employer stops offering any group health plan.
- You become covered under another group health plan after you elect COBRA.
- You become entitled to Medicare after you elect COBRA.
That last one catches people. COBRA does not protect you from Medicare's late-enrollment penalty, because it does not count as coverage based on current work. If you are close to 65, see our guide to when to sign up for Medicare before you rely on COBRA.
If the notice never comes
The employer and the plan administrator are legally responsible for sending the notice. If nothing has arrived within about 45 days of your last day of coverage, ask the plan administrator, or the employer's human resources office, in writing. The Department of Labor's Employee Benefits Security Administration answers questions about COBRA at 1-866-444-3272, and your 60 days start only when the notice is provided.
Questions about COBRA
Can I elect COBRA and then change my mind?
You can waive during the 60 days and still elect later within the window. Once you elect and pay, you can stop paying, but that ends the coverage, and dropping it generally does not open a Marketplace enrollment period.
Is COBRA available if I was fired?
Yes, unless the reason was gross misconduct, which is a narrow exception the employer would have to prove. Being fired for poor performance or a layoff does not remove the right.
Does each family member elect separately?
Each qualified beneficiary has an independent right to elect. A spouse can elect for the whole family unless the notice says otherwise, and a child can elect coverage even if the employee does not.
What if my employer has 12 employees?
Federal COBRA generally does not apply, but many states require smaller employers to offer continuation. Ask the plan administrator and your state insurance department.
What your notice controls
The plan's own documents set the premium, the payment address and the dates, and they control if they differ from this summary. This is general information and not legal advice. For a dispute, contact the Department of Labor or an employment attorney.
Official sources
Before the 60 days run out
Write down the last day of your old coverage and the date on the election notice, price a Marketplace plan with the Marketplace savings calculator and ask whether your doctors are in each network. Decide what you will do on day 30, not day 59. If a job loss is why you are reading, our job loss checklist covers the rest of the first weeks.
