Then the COBRA paperwork shows up, and suddenly that gap between paychecks looks like a canyon.
Employer health coverage doesn't actually end the day you're laid off.
Under federal law, most workers can keep the same plan for up to 18 months through COBRA.
The catch is brutal: you now pay the full premium yourself, plus a small administrative fee, instead of the portion your employer used to cover.
That shift is why the average COBRA bill lands around $700 to $750 a month for single coverage, according to estimates based on KFF's 2024 employer survey.
Family coverage runs closer to $2,100 a month.
For anyone used to seeing $150 deducted from a paycheck, the math hits like a second rent payment.
Employers typically cover about 70% to 80% of the premium, so workers never see the true cost.
When you go on COBRA, that hidden number becomes your problem.
You're essentially buying the same plan at retail price, with no group discount and no subsidy.
If you lose coverage because your employer shut down or laid you off — not because you quit — you may qualify for a subsidized ACA marketplace plan instead.
Enhanced premium tax credits have made many bronze and silver plans far cheaper than COBRA for middle-income households.
In some cases, a marketplace plan with similar coverage costs hundreds less per month.
You generally have 60 days from the date your coverage ends to elect COBRA, and the same window to enroll in a marketplace plan through a special enrollment period.
Miss both and you can be locked out until the next open enrollment.
A few practical moves can soften the blow.
First, ask HR for the exact COBRA premium in writing before your last day.
Second, price the same plan on HealthCare.gov and compare deductibles, not just monthly costs.
Third, check whether a spouse's employer plan allows mid-year enrollment after a job loss — many do.
Fourth, if you're healthy and between jobs briefly, a short-term or catastrophic plan may bridge the gap, though it often skips prescriptions and preventive care.
Dental and vision can be elected separately under COBRA, and they're sometimes worth keeping if you have expensive work coming up.
Standalone dental plans usually cost less, so run the numbers before saying yes.
If you elect it within 60 days, it covers you back to the day your old plan ended.
That means you can wait, see if you actually need care, and decide later — as long as you haven't already signed up elsewhere.
People panic, sign the COBRA form, and pay $700 a month for coverage they could have matched for $200 on the marketplace.
It pays to spend one afternoon comparing options before the deadline sneaks up.
My take: COBRA exists to protect people with serious ongoing medical needs, not to be the default choice for everyone.
Treat it as one option on a menu, not the only lifeboat.
Final Thoughts
A little comparison shopping during a stressful week can save thousands over the course of a year.