When a layoff hits, the first envelope many Americans open comes from their former employer's HR department.
It offers COBRA, the federal law that lets you keep your old job-based health plan for up to 18 months.
What the letter often buries is the number that makes people gasp: the full premium, with no employer subsidy attached.
Workers typically cover only a slice of their premium while employed, with the company picking up the rest.
On COBRA, you pay both halves plus a small administrative fee.
According to KFF's 2024 employer survey, the average annual premium for family coverage hit roughly $25,600, with employers covering about $19,300 of that.
Switch to COBRA and much of that employer share lands on your kitchen table.
For an individual plan, KFF pegs average annual premiums near $8,950.
A laid-off worker who paid maybe $100 to $150 a month through payroll could suddenly face $600 to $750 monthly, or more, depending on the plan and region.
The sticker shock is why COBRA enrollment has long lagged.
A 2023 study in Health Affairs found that only a fraction of eligible workers actually sign up, and cost is the leading reason.
People gamble on going uninsured or hunting for a cheaper marketplace plan instead.
The math gets worse when you factor in everything else a job loss brings.
Credit card balances start growing as families bridge the gap.
Adding a $700 monthly health bill on top of that can drain savings fast.
Losing job-based coverage counts as a qualifying life event, which opens a special enrollment period on HealthCare.gov.
Depending on your income and household size, you may qualify for premium tax credits that shrink a marketplace plan's cost well below COBRA.
For many families, that's the difference between a $700 bill and a $150 one.
You generally have 60 days from the coverage loss to elect COBRA, and a separate 60-day window for marketplace enrollment.
Miss both and you could be locked out until the next open enrollment, unless another qualifying event comes along.
Some people still choose COBRA on purpose.
If you've already met your deductible, love your doctors, or are mid-treatment, keeping the same plan can be worth the premium.
Others find a marketplace plan with a comparable network for less.
The right answer depends on your prescriptions, providers, and income.
One more wrinkle: the American Rescue Plan's temporary COBRA subsidy expired in 2022, so those generous government reimbursements are gone.
Unless Congress revives them, workers are on their own for the full amount.
Before writing that first check, compare three numbers side by side: your COBRA premium, a marketplace plan's premium after subsidies, and your expected out-of-pocket costs under each.
A free navigator or the HealthCare.gov calculator can run these in minutes.
Final Thoughts
Treat the 60-day window like a deadline that actually matters, because for most households, the cheapest coverage is rarely the plan they just lost.