Key Takeaways
- COBRA is usually 3-4x what you were paying for insurance
- You have 60 days to decide—use this time wisely
- Coverage is retroactive, so you can wait and see if you need it
The COBRA Basics
"COBRA is $2,000/month—I can't afford that" — Welcome to the full cost of health insurance
What is COBRA?
The Consolidated Omnibus Budget Reconciliation Act lets you continue your employer's health plan after leaving—but at full cost.
| Feature | Details |
|---|---|
| Duration | Up to 18 months (29 months for disability) |
| Coverage | Same plan, same network, same benefits |
| Cost | Up to 102% of full premium (employer + employee portions) |
| Election window | 60 days from notice |
| Retroactive | Coverage goes back to termination date |
The Cost Shock
When employed, you saw only your portion of the premium. Your employer paid the rest.
2025 Average COBRA Costs:
| Coverage Type | Average Monthly Cost |
|---|---|
| Individual | $777/month ($9,324/year) |
| Family | $2,249/month ($26,988/year) |
These are national averages—your actual cost depends on your employer's plan. Here's what the shift looks like:
| When Employed | COBRA | |
|---|---|---|
| Your payment | $200-400/month | $777-2,249/month |
| Employer payment | $500-1,800/month | $0 |
| Total | Full premium | Full premium + 2% admin |
You were paying ~25%; now you pay 102% (full cost plus admin fee).
When COBRA Makes Sense
| Good Reasons for COBRA | Why |
|---|---|
| Mid-treatment for serious condition | Keep your current doctors |
| Specific specialists you need | Network continuity matters |
| Already met your deductible | Don't reset to $0 |
| Expecting short job search | 1-2 months is manageable |
| Pregnant | Changing plans mid-pregnancy is risky |
The COBRA Safety Net Strategy
Because COBRA is retroactive and you have 60 days to elect:
- Don't enroll immediately
- Explore Marketplace options (see next lesson)
- If you get sick/injured in those 60 days, elect COBRA retroactively
- If nothing happens, you might choose Marketplace instead
This strategy gives you optionality, but be careful—if Day 61 hits and you haven't decided, you lose COBRA eligibility forever.
How long do you have to elect COBRA coverage after termination?