Then comes the letter offering you COBRA coverage, and the price tag that makes your stomach drop.
For millions of Americans between jobs, that monthly bill is now one of the biggest financial shocks of a layoff.
COBRA lets you keep your former employer's health plan for up to 18 months, sometimes longer.
The catch: you pay the full premium yourself, plus a 2% administrative fee.
Your employer's share disappears overnight.
The average job-based family plan costs roughly $25,000 a year, according to the latest employer survey from KFF.
Workers typically cover about $6,500 of that.
On COBRA, you'd owe close to the entire $25,000 — over $2,000 a month in many cases.
The average individual plan runs about $8,900 a year, and employees usually pay around $1,400 of it.
Switch to COBRA and that monthly bill can jump from roughly $120 to more than $750.
Those are averages, so your real number depends on your plan, your state, and how generous your old employer was.
Some workers with skimpy employer contributions face even steeper jumps.
You generally have 60 days from losing coverage to elect COBRA — and you can even retroactively sign up if you get sick during that window.
Most people don't realize there's a cheaper lane.
The Health Insurance Marketplace, also called Obamacare coverage, is often dramatically less expensive, especially if your income drops after a layoff.
Enhanced federal subsidies have kept many households paying under $100 a month for a marketplace plan.
Marketplace plans come with networks and deductibles that may differ from your old job's coverage, and your doctor might not be in-network.
If your partner has employer coverage, joining it is usually the cheapest route of all.
Losing your job counts as a qualifying life event, so you can enroll outside the normal open season.
If COBRA still wins on doctors and prescriptions, there's a workaround.
You have 60 days to decide, so you can enroll in a marketplace plan and keep COBRA as a backup during that stretch.
Just don't drag your feet — the paperwork piles up fast.
Some states also run their own extended programs.
California's Cal-COBRA, for example, can stretch coverage beyond the federal 18 months.
Check what your state offers before assuming the federal rules are the whole story.
A few money-saving moves worth making right away: compare marketplace quotes the same week you get your layoff notice, ask HR for the exact COBRA premium in writing, and check whether you qualify for subsidies based on your new, lower income.
One more thing people miss — you may be able to deduct COBRA premiums if they exceed a certain share of your income.
It's not a cure-all, but it can soften the blow at tax time.
The bottom line: COBRA is a safety net, not a bargain.
Treat that 60-day window like a countdown clock and price out every option before you commit.
Final Thoughts
A few hours of comparison shopping can save you thousands over the year.