Then the health insurance bill shows up, and it gets worse.
For millions of Americans who get laid off each year, COBRA is the option they're handed first — and the price tag is often a punch to the gut.
COBRA lets you keep your former employer's health plan for up to 18 months in most cases.
The catch: you now pay the full premium yourself, both the part your boss used to cover and your own share.
Add a 2% administrative fee on top, and the math turns ugly fast.
The average family premium for employer-sponsored coverage ran about $25,572 a year in 2024, according to the Kaiser Family Foundation.
Workers typically paid around $6,575 of that.
On COBRA, you'd owe close to the full amount — roughly $2,100 a month for family coverage.
For single coverage, the gap is smaller but still stings.
Average annual premiums hit about $8,951, with workers covering around $1,368.
On COBRA, that single plan could cost you around $760 a month instead of $114.
Many newly unemployed workers see their monthly health bill jump five to six times overnight, right when their income has stopped.
There's a 60-day window to decide, starting from when your coverage ends or you get the election notice, whichever is later.
Miss it, and you're locked out — no exceptions, no do-overs.
Here's where people leave money on the table.
The Health Insurance Marketplace often offers subsidized plans that cost far less than COBRA, especially if your income drops after a layoff.
Losing job-based coverage counts as a qualifying life event, so you can enroll outside open season.
A Kaiser Family Foundation analysis found that most eligible COBRA enrollees could get marketplace coverage with premium tax credits.
In many cases, the subsidy-covered plan costs a fraction of the COBRA price for similar coverage.
Before you write that first COBRA check, compare three things: the monthly premium, the deductible, and whether your doctors are in network.
A cheaper marketplace plan with a higher deductible can still win if you're healthy and rarely use care — but it can backfire if you have ongoing prescriptions or specialists.
If you have a chronic condition, check whether your current doctors and medications are covered under any marketplace plan you're considering.
Switching mid-treatment is where people get burned.
One more wrinkle: some employers offer a severance package that covers COBRA for a few months.
If the company pays, you may still need to elect coverage yourself, and the subsidy usually ends on a set date.
If you're already on COBRA and struggling, you can drop it during open enrollment or a special enrollment period and switch to a marketplace plan.
The bottom line: COBRA is convenient, not cheap.
Treat the election notice as a deadline to shop, not a bill to autopay.
Final Thoughts
Comparing marketplace options before that 60-day clock runs out could save a laid-off worker thousands over a year — money that matters most exactly when a paycheck disappears.