Then the health insurance bill shows up, and for many American families it lands somewhere between a second rent payment and a mortgage.
COBRA lets you keep your employer's health plan after leaving a job, getting laid off, or losing coverage through a spouse.
The catch is that you now pay what your employer used to cover.
That means the full premium plus a small administrative fee, usually around 2 percent.
According to KFF's annual employer survey, average annual premiums in 2024 ran about $8,951 for single coverage and $25,572 for family coverage.
Employers typically pick up roughly 70 to 80 percent of that tab.
Once you're on COBRA, that subsidy disappears.
Do the monthly math and a family plan can run north of $2,000 a month.
Single coverage often lands between $700 and $800.
For someone collecting unemployment, that can swallow most of a weekly benefit check.
There's a reason the sticker shock hits so hard.
Workers rarely see the true cost of their coverage because it's buried in total compensation.
COBRA is the moment that hidden number becomes visible, and it rarely arrives at a convenient time.
One temporary cushion exists, but it's narrow.
The American Rescue Plan's full COBRA subsidy ended in 2022, and no broad federal replacement has taken its place.
A few states run their own premium assistance programs, and eligibility rules vary widely, so it's worth checking your state insurance department before assuming you're on your own.
You generally have 60 days from losing coverage to elect COBRA, and you can sometimes retroactively enroll if you change your mind within that window.
Before writing that first check, compare the real options.
A marketplace plan through HealthCare.gov could come with subsidies based on your new income, which often drops sharply after a job loss.
Losing job-based coverage qualifies you for a special enrollment period, so you don't have to wait for open enrollment.
An ACA subsidy can cut a marketplace premium dramatically for a household with little or no income.
In some cases, a bronze or silver plan costs less per month than COBRA, even with a higher deductible.
The trade-off is network and provider changes, which matters if you're mid-treatment.
Short-term health plans look cheap, but they often exclude pre-existing conditions and skip essential benefits.
They can work as a stopgap for the healthy and lucky, not as real coverage for anyone managing a chronic condition.
If your income is very low, Medicaid may be the fastest and cheapest route.
Eligibility depends on your state, and several states have not expanded coverage, so the answer isn't uniform.
One more move worth making: ask HR for the exact COBRA rate in writing before your last day.
Guessing leads to bad decisions, and the gap between what you assume and what you owe is often thousands of dollars a year.
Our take: COBRA is a safety net, not a strategy.
Final Thoughts
It protects continuity of care when that's worth the premium, but for most households it should be the benchmark you beat, not the default you accept.