COBRA is a federal law that lets workers and their families keep the same employer group health plan for a limited time after losing it. The Department of Labor states that it applies to "group health plans sponsored by employers with 20 or more employees in the prior year," that the person "usually pay[s] the full premium," which can be "up to 102%" of the plan's cost, and that coverage generally runs 18 months after a job loss and up to 36 months after certain other events. It is one option between jobs. A Marketplace plan, Medicaid or a new employer's plan are the others.
This article explains a US federal law as the Department of Labor and HealthCare.gov describe it. It is general information, not legal, insurance or financial advice, and it does not say which coverage anyone should choose. The plan administrator, the Department of Labor's Employee Benefits Security Administration and HealthCare.gov are the authorities for your own situation.
Sources read September 11, 2026. Premium rules and Marketplace enrollment rules can change; each rule below names the page it comes from.
COBRA coverage explained: what it is and who it covers
The Department of Labor's COBRA page, read September 11, 2026, defines it: COBRA "gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events."
Three points in that sentence carry most of the meaning.
It is the same plan. COBRA continues the group coverage that already existed. It is not a new policy and not a separate insurer. The network, the deductible and the drug list stay as they were, which matters for anyone partway through treatment or partway through a deductible.
It covers the family members who were on the plan. The Department of Labor's COBRA FAQ for workers, read September 11, 2026, describes qualified beneficiaries as the covered employee, a spouse or former spouse, and dependent children who were covered immediately before the qualifying event.
It depends on employer size. Federal COBRA reaches employers with 20 or more employees in the prior year. Many states have their own continuation rules for plans the state regulates, including smaller employers, and the state Department of Insurance is the office that can say whether one applies.
How long COBRA lasts
The Department of Labor's FAQ sets the maximum periods by the kind of event:
| Qualifying event | Maximum COBRA period |
|---|---|
| Job loss or reduction in hours | 18 months |
| Death of the employee, divorce or legal separation, the employee's Medicare entitlement, or a child losing dependent status | 36 months |
| A disability extension, where a qualified beneficiary meets the rules | An additional 11 months, 29 months in total |
Department of Labor, COBRA FAQ for workers, read September 11, 2026.
What it costs, in the Department of Labor's words
The Department of Labor does not describe a dollar figure, because the premium is the plan's own cost. It describes the formula instead: "You usually pay the full premium for COBRA. The total premium includes both the share you used to pay as an active employee and the amount your employer used to contribute, plus two percent."
That is the "up to 102%" figure, and during a disability extension the Department of Labor states that a plan can charge up to 150%. The number that surprises most people is not the 2%. It is the employer's share, which never appeared on a pay stub and now becomes the member's.
One tax detail connects here. IRS Publication 969 (2025), read September 11, 2026, lists COBRA continuation coverage among the few insurance premiums that health savings account (HSA) money can pay, alongside coverage while receiving unemployment compensation.
The deadlines, in order
This is the part most COBRA pages list separately, and it is clearer as a timeline. Each deadline is from the Department of Labor's COBRA FAQ or HealthCare.gov, both read September 11, 2026.
| Step | Who acts | Deadline |
|---|---|---|
| The employer tells the plan about a job loss, reduced hours or death | Employer | Within 44 days of the qualifying event |
| The employee or family tells the plan about a divorce, legal separation or a child losing dependent status | Employee or family member | Within 60 days |
| The person decides whether to elect COBRA | Qualified beneficiary | 60 days, "starting from when your coverage ends or when your COBRA election notice is provided to you or mailed, whichever is later" |
| The first premium is paid after electing | Qualified beneficiary | 45 days after the election |
| A Marketplace plan can be chosen after losing job-based coverage | The person | Within the 60-day special enrollment window HealthCare.gov describes |
The election notice from the plan administrator states the exact dates for that plan, including the date elected coverage begins and when each premium is due. Those dates, not a general article, govern a specific case.
COBRA and the Marketplace: the timing trap
HealthCare.gov's COBRA page, read September 11, 2026, sets out when a person on COBRA can move to a Marketplace plan, and the rule is narrower than many people expect.
- During Open Enrollment: "You can enroll in a Marketplace plan, regardless of why you're ending COBRA coverage."
- When COBRA runs out: "When your COBRA coverage ends, you have 60 days to enroll in a Marketplace health plan through a Special Enrollment Period."
- Outside Open Enrollment, by choice: "If you choose to end COBRA coverage early, you'll have to wait until next Open Enrollment to get Marketplace coverage." HealthCare.gov adds: "Voluntarily dropping COBRA doesn't count. Choosing to stop paying COBRA premiums on your own doesn't qualify."
HealthCare.gov also describes other situations that can allow a switch, including an employer that stops contributing so the person must pay the full cost.
This is the information most people miss. The 60-day window after losing job-based coverage and the decision to elect COBRA can run at the same time. After that window closes, stopping COBRA payments on purpose does not open a new Marketplace window. HealthCare.gov notes that "Marketplace plans may cost less than COBRA, especially if you qualify for savings based on your income," and the Marketplace application is where that eligibility is determined.
The other options between jobs
The Department of Labor's FAQ points out that Marketplace coverage, Medicaid, the Children's Health Insurance Program and other group plans, such as a spouse's employer plan, may be alternatives worth comparing before choosing COBRA.
Comparing them is less about the premium than about three plan features:
- The network. A new plan can have a different network type and different doctors. Our comparison of what the HMO, PPO and EPO letters change covers what the network letters mean, and our checklist on how to verify a doctor is in network covers checking a specific provider.
- Where the year's spending stands. COBRA keeps the same plan, so amounts already paid toward the deductible and out-of-pocket maximum carry on under that plan's rules. A new plan starts its own count. Our explainer on what counts toward your out-of-pocket maximum covers how that running total works.
- The deductible design. A lower-premium plan may carry a higher deductible, a trade-off set out in our piece on the low premium, high deductible trade-off.
Which of these options is better for any person depends on their health needs, household and income, and that is not a judgment an article can make.
What COBRA does not do
It does not reduce the premium. It does not let a person move to a plan of their choice beyond the options the employer offers its active employees. It does not reach employers below the federal size threshold, where state continuation law, if any, applies instead. And it is time-limited: when the maximum period ends, the coverage ends, which is the point HealthCare.gov's 60-day Special Enrollment Period is built around.
Who can answer a question about your own coverage
The plan administrator named in the COBRA election notice, for the premium, the dates and the election form. The Department of Labor's Employee Benefits Security Administration, for questions about an employer's COBRA obligations; the Department of Labor lists EBSA at 1-866-444-3272. HealthCare.gov, for Marketplace eligibility and enrollment windows. The state Department of Insurance, for state continuation rules. What they need from you: the election notice, the date coverage ended, the qualifying event and the plan name.
Frequently asked questions
How long do I have to elect COBRA?
The Department of Labor states: "You have 60 days to enroll in COBRA, starting from when your coverage ends or when your COBRA election notice is provided to you or mailed, whichever is later."
How long does COBRA coverage last?
The Department of Labor lists 18 months after a job loss or reduction in hours and 36 months after events such as the employee's death, divorce or a child losing dependent status, with an 11-month disability extension to 29 months in qualifying cases.
How much does COBRA cost?
The Department of Labor states that plans can charge up to 102% of the cost to the plan, which is the full premium, including the share the employer used to pay, plus two percent.
Can I drop COBRA and switch to a Marketplace plan?
During Open Enrollment, yes. Outside it, HealthCare.gov states that choosing to end COBRA early means waiting until the next Open Enrollment, because "voluntarily dropping COBRA doesn't count" for a Special Enrollment Period.
Sources, all read September 11, 2026: U.S. Department of Labor, "Continuation of Health Coverage (COBRA)," no date shown. U.S. Department of Labor, Employee Benefits Security Administration, "FAQs on COBRA Continuation Health Coverage for Workers," no date shown. HealthCare.gov, "COBRA coverage when you're unemployed," no date shown. IRS Publication 969 (2025).
