Then the paperwork arrives, and one number jumps off the page: the price of keeping your health insurance through COBRA.
Under federal law, most employers with 20 or more workers must offer departing employees the chance to stay on the company plan for up to 18 months.
The catch is that you now pay the full premium — the part your employer used to cover, plus your own share, plus a 2% administrative fee.
According to KFF's 2024 Employer Health Benefits Survey, the average annual premium for family coverage was $25,572, with employers covering about $19,276 of that.
Do the division and a former employee could be looking at roughly $2,100 a month to keep the family plan — over $25,000 a year for coverage that used to feel like a payroll deduction.
The same survey put average annual premiums at $8,951, with workers contributing about $1,368.
On COBRA, that single adult could suddenly owe around $760 a month.
The 2% admin fee adds a few dollars more on top.
The sticker shock is real, but COBRA is rarely the cheapest option.
If you have a doctor you love, a deductible you've already been paying down, or a condition that makes switching plans risky, staying put for a few months can be worth the premium.
For everyone else, the marketplace is usually the first place to look.
Healthcare.gov and state exchanges offer subsidized plans, and a job loss counts as a qualifying life event, so you can enroll outside open enrollment.
If your income drops after losing work, you may qualify for premium tax credits that shrink the monthly bill dramatically — sometimes to under $100 for a bronze plan.
In the 40 states that expanded coverage under the Affordable Care Act, adults can qualify based on income alone.
A family of four in most of those states can earn up to around $43,000 a year and still get in.
If your partner has employer coverage, a special enrollment window typically opens when you lose yours.
Adding a spouse to an existing plan is often cheaper than a standalone COBRA bill, though family deductibles restart.
Short-term health plans look tempting online — some advertise rates under $200 a month.
These policies often exclude pre-existing conditions, skip maternity and mental health coverage, and cap annual payouts.
One more thing people miss: COBRA has a 60-day election window.
You can wait, see how the job hunt goes, and elect coverage retroactively if something happens.
If you stay healthy, you've saved two months of premiums.
If you get hurt, you're covered back to day one.
It's a legitimate strategy, though you'll owe the full back premium.
Dental and vision are usually separate elections, and you can pick them independently.
If you only need the eye exam, you don't have to buy the whole bundle.
The bottom line: COBRA protects continuity, not your wallet.
Treat it as a bridge, not a destination — and price the alternatives before you sign. **Our take:** COBRA exists for people who genuinely need it, but too many families default to it out of panic in the first week after a layoff.
Give yourself a day to run the numbers on the marketplace and Medicaid first.
Final Thoughts
That single afternoon can be worth thousands.