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INSURANCE

What is COBRA and how does it work?

SHORT ANSWER

COBRA lets you keep your employer’s health plan after leaving a job — usually up to 18 months — but you pay the full premium yourself, which is often a shock. You typically have 60 days to elect it.

COBRA continuation coverage means losing your job doesn’t have to mean losing your health plan: you can keep the exact same coverage, typically for up to 18 months (longer in some situations). The catch is cost — your employer stops subsidizing, so you pay the entire premium plus a small admin fee, often several times what came out of your paycheck. You generally have 60 days from notice to elect COBRA, and coverage is retroactive to the loss date if you do. Before electing, compare marketplace plans — losing job coverage is a qualifying event, and subsidized marketplace coverage is often cheaper than COBRA.

What to do, in order

  1. Watch for the COBRA election notice after coverage ends.
  2. Note the 60-day election window.
  3. Price it: full premium plus admin fee, no employer subsidy.
  4. Compare marketplace plans — job loss opens a special enrollment.
  5. Elect within the window if COBRA is the right fit; it’s retroactive.

Common questions

Why is COBRA so expensive?

You pay the full cost of the plan — the share your employer used to cover plus your old share, and up to a small administrative fee.

Is there a cheaper alternative to COBRA?

Often — losing employer coverage triggers a special enrollment period for marketplace plans, which may come with income-based subsidies COBRA doesn’t offer.

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