Then the health insurance bill shows up, and for a lot of Americans it lands somewhere between a car payment and a mortgage.
COBRA lets you keep your old workplace health plan for up to 18 months after you leave a job.
The catch is that your employer usually stops paying its share.
That means you're suddenly on the hook for the full premium — both the part that used to come out of your paycheck and the part your boss quietly covered.
According to KFF's 2024 Employer Health Benefits Survey, the average annual premium for family coverage hit $25,572.
Workers typically paid about $6,575 of that, while employers picked up the rest.
On COBRA, you'd owe the entire $25,572 — roughly $2,131 a month.
For single coverage, the total averaged $8,951 a year, or about $746 a month.
That's often more than rent for a studio apartment in plenty of cities.
You may also pay a 2% administrative fee on top.
Dental and vision plans often cost extra.
If you had a flexible spending account, that money doesn't automatically roll over the same way.
First, don't panic-sign the COBRA paperwork the day it arrives.
You usually have 60 days from the date your coverage ends to elect it, and if you enroll, coverage can be retroactive to the day you lost your job.
Healthcare.gov runs open enrollment each fall, but losing job-based coverage counts as a qualifying life event, so you can shop the marketplace anytime within 60 days of the loss.
Depending on your income, you might qualify for subsidies that shrink the premium dramatically.
Some states have their own marketplaces with extra help.
Medicaid may also be an option if your income dropped, especially in states that expanded eligibility.
Fourth, run the real numbers before deciding.
If you're healthy and rarely see a doctor, a cheaper marketplace bronze plan with a high deductible might beat COBRA.
If you're mid-treatment or your doctors are only in your old plan's network, paying for COBRA can be worth it to keep the same providers.
One trap to watch: short-term health plans.
They can deny coverage for pre-existing conditions, cap what they'll pay, and skip essential benefits like maternity care or mental health.
Another move people miss — ask HR for the COBRA election notice details and confirm the exact end date of your coverage.
Then call your doctors and ask which plans they take.
A 20-minute phone call can save you thousands.
The blunt truth is that COBRA was designed as a bridge, not a long-term solution, and the price tag reflects a system where employers carry most of the load.
If you're staring down that bill, treat the 60-day window like a deadline for a scavenger hunt — subsidies, Medicaid, spouse's plan, marketplace — and compare every option before you commit.
Final Thoughts
The sticker price is scary, but the alternatives are often cheaper than people assume.