You have 60 days to elect COBRA after losing your employer health coverage. That’s it. Miss the deadline and you lose the option entirely — no exceptions, no extensions.
Most people don’t know that. Or they know it vaguely but assume they’ll deal with it later. Then later becomes too late.
COBRA — the Consolidated Omnibus Budget Reconciliation Act — lets you continue your employer’s group health plan after you leave a job. It’s the same plan, the same network, the same coverage. The only thing that changes is who pays. And that’s where it gets complicated.
This post breaks down how COBRA actually works, what it costs, when your deadlines hit, and how to decide whether it’s the right choice for you.
How COBRA Works
When your employment ends, your employer is required to send you a COBRA election notice within 14 days. That notice will include details about your coverage options, the cost, and your election deadline.
Once you receive the notice, you have 60 days to elect COBRA. If you elect, your coverage is retroactive to the day it would have lapsed — meaning there’s no gap. If you need medical care during the election window, you can elect retroactively and submit claims for services received during that period.
COBRA typically lasts 18 months for most qualifying events. In some cases — like disability or the death of the covered employee — it can extend to 29 or 36 months. Your election notice will specify your maximum coverage period.
What It Costs — and Why It’s a Shock
Here’s the part that catches most people off guard. When you were employed, your employer likely paid 50% to 80% of your health insurance premium. You only saw the employee portion on your paycheck.
Under COBRA, you pay 100% of the premium — plus a 2% administrative fee. So if the total monthly premium for your plan was $1,800 and you were paying $400 as an employee, your COBRA cost is now around $1,836 per month.
For family coverage, COBRA premiums can run $2,000 to $2,500 per month or more. That’s a significant expense when your income just dropped.
This is why COBRA is rarely the cheapest option — but it’s sometimes the right one. If you’re mid-treatment, have a specific provider you need to keep, or have already hit your deductible for the year, the continuity might be worth the cost.
Your Three Options — Side by Side
After losing employer coverage, most people have three paths. Each has trade-offs.
COBRA. Keeps your exact plan. No network changes. No new deductible. But the premium is high, and it’s temporary — 18 months max for most people.
Marketplace insurance. Losing employer coverage triggers a Special Enrollment Period on healthcare.gov. You have 60 days from your coverage end date to enroll. Premiums are often lower than COBRA, especially if your income has dropped — because marketplace plans qualify for subsidies based on income. The trade-off: you may need to switch doctors or networks.
A spouse or partner’s plan. If your spouse has employer coverage, losing your own job is a qualifying life event that lets you join their plan outside of open enrollment. This is often the simplest and most affordable option.
The key is to compare all three before your 60-day window closes. Look at premiums, deductibles, out-of-pocket maximums, prescription coverage, and whether your current providers are in-network.
Lumeway’s Health Insurance Comparison Worksheet helps you line up COBRA, marketplace, and spouse’s plan details side by side — premiums, deductibles, networks, and prescription coverage in one view. View templates
Key Deadlines You Cannot Miss
Within 44 days of your last day: Your employer and plan administrator must send you the COBRA election notice. (Your employer has 30 days to notify the plan administrator, who then has 14 days to send you the notice.)
60 days after receiving the notice: Your deadline to elect COBRA. This is firm.
60 days after losing coverage: Your window to enroll in a marketplace plan through the Special Enrollment Period.
45 days after electing COBRA: Your deadline to make the first premium payment. This payment is retroactive to your coverage start date.
Write these dates down the day you receive your COBRA notice. Put them in your phone. These are not the kind of deadlines that send reminders.
When COBRA Makes Sense — and When It Doesn’t
COBRA is worth considering if you’re in the middle of a treatment plan and switching providers would disrupt your care. It can also make sense if you’ve already met your annual deductible — starting over with a new plan means paying that deductible again.
COBRA is harder to justify if you’re healthy, not currently seeing specialists, and your income has dropped significantly. In that case, a marketplace plan with income-based subsidies will almost always be cheaper.
Some people use COBRA as a short-term bridge — electing it for a month or two while they wait for a new employer plan to start. That’s a valid strategy, especially since COBRA coverage is retroactive. You can wait to see if you need it, then elect before the 60-day deadline.
That said, the retroactive strategy carries risk. If something serious happens during the gap and you haven’t elected yet, you’ll need to act fast.
If you decide to elect COBRA, Lumeway’s COBRA Election Letter worksheet walks you through organizing your response — step by step, with all the details your plan administrator needs. View templates
What to Do This Week
If you’ve recently lost your job and your health coverage is ending, here’s what to handle now.
Step 1. Find out your exact last day of employer coverage. It’s not always your last day of employment — some plans cover through the end of the month.
Step 2. Watch for your COBRA election notice. If it hasn’t arrived within 14 days, contact your former employer’s HR department.
Step 3. Check healthcare.gov for marketplace options. You can browse plans and estimate costs before committing.
Step 4. Ask your spouse or partner about their employer plan and whether you can be added.
Step 5. Compare all three options — premiums, deductibles, networks, prescriptions — before making a decision.
Every situation is different. If your medical needs are complex or you have dependents on your plan, consider speaking with a licensed insurance broker who can walk you through the specifics.
Stay organized through job loss
The Job Loss & Income Crisis Bundle includes 14 step-by-step worksheets covering severance, COBRA, budgeting, job search tracking, and more.
Not sure where to start? Our free Transition Navigator at lumeway.co walks you through the general timeline for job loss — step by step.
This post is for informational purposes only and does not constitute legal, financial, or medical advice. Consult a licensed professional for guidance specific to your situation.