Then the COBRA paperwork arrives, and the price tag can feel like a second gut punch.
For millions of Americans, continuing their employer-sponsored health coverage sounds like the safe choice—until they see what it actually costs.
According to recent industry data, the average annual COBRA premium for family coverage now tops $25,000, with workers typically on the hook for the full amount plus a 2% administrative fee.
Individual plans aren't much kinder, often running $700 to $900 a month depending on the state and plan design.
When you're employed, your company usually covers 70% to 80% of the premium.
Once you're on COBRA, that subsidy vanishes.
You're paying both the employer and employee share—plus that administrative surcharge—for up to 18 months (sometimes 36 for certain life events).
You generally have 60 days from your coverage end date to elect COBRA, and the clock starts whether you're ready or not.
Miss it, and you may be locked out until the next open enrollment period.
But here's the catch: you can also wait and enroll retroactively if you end up needing care, as long as you decide within that 60-day window.
Before you write that first check, compare your options.
ACA marketplace plans often come with subsidies based on your projected income after a job loss—which could drop your monthly premium to under $100 in many states.
A licensed broker or the federal marketplace at Healthcare.gov can run the numbers in minutes.
Medicaid is another route if your income falls below your state's threshold.
Dental and vision are usually separate line items on COBRA, and they can add $50 to $100 a month.
If you don't need them immediately, dropping those riders is an easy way to trim the bill.
One more thing people overlook: if you have a chronic condition or ongoing prescriptions, check the formulary on any replacement plan before you switch.
A cheaper premium means nothing if your medication jumps from $30 to $400 a month.
The bottom line: COBRA is a safety net, not always the smartest financial move.
Our take: COBRA exists to protect you, but it's rarely the bargain it appears to be.
Final Thoughts
Spend an afternoon shopping the marketplace and talking to a navigator—your wallet will thank you.