The moment a layoff hits, most people think about the paycheck first.
Then the Cobra letter arrives, and the number on it can feel like a second gut punch.
For a family of four, keeping your current workplace plan through Cobra often runs $1,800 to $2,200 a month — because you're now paying both the employee's share and the portion your employer quietly covered all along.
That's the part few people understand until they're staring at the paperwork.
Your boss wasn't just paying your salary.
They were also covering roughly 70 to 80 percent of your health premium.
Once you're on Cobra, that subsidy vanishes, and you inherit the full sticker price plus a small administrative fee, usually around 2 percent.
Individual coverage through an employer runs about $8,400 a year in total premiums, according to the latest Kaiser Family Foundation survey.
Divide that by twelve, add the admin fee, and a laid-off worker can be looking at $700 a month just for themselves — or well over $1,900 for a family.
Cobra feels like the safe, familiar choice, so many people sign up on autopilot.
But you typically have 60 days to decide, and you can even retroactively enroll during that window.
That grace period is your friend: it buys time to shop the Obamacare marketplace, where income-based subsidies can slash the bill dramatically after a job loss.
The catch on subsidies is that they're tied to your estimated annual income, not your old salary.
A year with several months of unemployment often means a much lower projected income — which can translate into a far cheaper marketplace plan than the Cobra quote sitting on your kitchen table.
A licensed navigator or the healthcare.gov calculator can run those numbers in minutes.
First, losing job-based coverage counts as a qualifying life event, so you don't have to wait for open enrollment.
Second, dental and vision are often separate line items on Cobra and can be dropped individually if you find cheaper standalone coverage.
None of this means Cobra is always the wrong call.
If you have ongoing treatment and want to keep the exact same doctors and network, the continuity may be worth the premium for a few months.
But paying it blindly, without comparing, is how a temporary gap turns into a year of drained savings.
The takeaway is simple: treat that Cobra letter as a starting bid, not a final bill.
Final Thoughts
Spend an afternoon comparing marketplace plans before the 60-day clock runs out, and let the math — not fear — make the decision.