Then the health insurance bill shows up, and a lot of Americans find out the hard way what their coverage actually costs.
COBRA lets you keep your employer's health plan for up to 18 months after leaving a job.
The catch: your company used to pay most of the premium, and now you owe both halves, plus a small administrative fee.
That can turn a $150 payroll deduction into a $650 monthly bill.
The numbers vary by plan, but the pattern is consistent.
According to KFF's annual employer survey, the average family premium for job-based coverage runs north of $25,000 a year.
Workers typically chip in around $6,500 of that.
On COBRA, you could be on the hook for the whole thing, which works out to more than $2,000 a month for some families.
For anyone living paycheck to paycheck, that math doesn't work.
A recent stretch of layoffs across tech, media, retail, and manufacturing has pushed more households into this exact decision, and many are discovering COBRA isn't their only option.
If you lose job-based coverage, you qualify for a special enrollment period on HealthCare.gov, and you generally have 60 days from the coverage loss to sign up.
Subsidies under the Affordable Care Act are often far more generous than what COBRA offers, especially for middle-income families who assume they earn too much to qualify.
Here's the part that trips people up: enhanced ACA subsidies that lowered premiums for millions are set to expire at the end of 2025 unless Congress acts.
If they lapse, marketplace plans could get noticeably pricier in 2026, which changes the COBRA comparison for a lot of households.
A few practical moves if you're staring down a COBRA election form: Run the marketplace quote first.
Enter your income and household size on HealthCare.gov before you decide.
A special enrollment window usually applies there too, and adding one person is often cheaper than a full COBRA family premium.
Some employers cover COBRA for a set number of months as part of a layoff package.
Read the fine print before you pay out of pocket.
You typically have 60 days to elect COBRA.
Miss it, and you may be locked out until the next open enrollment period.
Also worth knowing: you can drop COBRA and switch to a marketplace plan later, but you generally can't jump back onto COBRA once you've let it go.
And if you skip coverage entirely, you won't face a federal penalty anymore, but one hospital visit can wipe out whatever you saved on premiums.
For healthy people with savings, a short gap might pencil out.
For anyone managing a chronic condition, prescriptions, or a pregnancy, going uninsured is a gamble most families can't afford to take.
The bigger issue is that COBRA was designed for a world where employer plans were the default and marketplace options were thin.
Today, sticking with COBRA out of habit or fear can cost a household thousands of dollars a year it doesn't need to spend.
Shop the marketplace, compare the real numbers, and treat the COBRA paperwork like the deadline it is.
Final Thoughts
The system isn't built to look out for you here, so a few hours of comparison shopping can be the highest-paid work you do all year.