COBRA After a Layoff: Deadlines, Cost and Your Other Options
COBRA keeps your old health plan after a layoff, but you pay nearly the whole premium. The deadlines, the retroactive coverage rule and how it compares with a Marketplace plan.
After a layoff, COBRA lets you and your covered family keep the same employer health plan for up to 18 months, at up to 102% of the plan’s full cost. You get at least 60 days to elect it. Your exact deadline, premium and plan administrator are listed in the COBRA election notice.
COBRA is a federal law enforced by the US Department of Labor. The rules below come from the department’s Employee’s Guide to Health Benefits Under COBRA and HealthCare.gov, checked as of November 2026.
Who qualifies for COBRA after a layoff?
You qualify if you were covered by your employer’s group health plan, the employer had at least 20 employees on more than half of its typical business days in the previous calendar year, and you lost coverage because your job ended or your hours were cut. A layoff counts. Being fired also counts unless the employer can show “gross misconduct.”
- Your spouse and dependent children who were on the plan each have their own right to elect, even if you decline.
- Part-time workers count toward the 20-employee test as a fraction of a full-time worker.
- Plans run by the federal government and by churches are not covered by COBRA.
- Employers with fewer than 20 employees may fall under a state “mini-COBRA” law. Your state insurance department can tell you whether one applies.
What are the COBRA deadlines?
The main deadline is yours: you have at least 60 days to elect COBRA, counted from the later of the date the election notice is provided or the date your coverage ends. The employer and plan have their own clocks before that.
| Step | Deadline | Who acts |
|---|---|---|
| Employer tells the plan about the layoff | Within 30 days of the job loss | Employer |
| Plan sends the election notice | Within 14 days of hearing from the employer | Plan administrator |
| You elect COBRA | At least 60 days from the later of the notice or the loss of coverage | You and each family member |
| First premium payment | At least 45 days after you elect | You |
| Later monthly payments | Due dates set by the plan, with a grace period of at least 30 days | You |
If you first waive COBRA and change your mind, you can revoke the waiver as long as the election period is still open.
Is COBRA coverage retroactive?
Yes, in practice. Because you can elect late in the 60-day window and pay up to 45 days after that, coverage you elect is backdated to the day your old coverage ended, as long as you pay the premiums for that period. If a doctor visit happens during the gap, the plan may hold the claim until you elect and pay. Missing the first payment window lets the plan end your COBRA rights.
How much does COBRA cost?
The plan can charge up to 102% of the total cost of coverage: the share you paid as an employee, the share your employer paid, and 2% for administration. That is why COBRA bills often look several times larger than the deduction you saw on your paycheck.
If you qualify for the 11-month disability extension, the premium for those extra months can rise to 150%. Some severance agreements include an employer subsidy for COBRA premiums for a set number of months; the agreement, not COBRA law, decides how long that lasts. Our guide to severance pay rules covers what those agreements usually contain.
How long does COBRA last?
For a layoff or a cut in hours, COBRA lasts up to 18 months. It can run longer in two cases.
- Disability: if Social Security finds that you or a covered family member was disabled during the first 60 days of COBRA, coverage can extend to 29 months in total.
- Second qualifying event: if a second event such as divorce or the employee’s death happens during the 18 months, covered family members may get up to 36 months in total.
Coverage can also end early: if you stop paying, if you get coverage under another group health plan, if you become entitled to Medicare, or if the employer stops offering any group health plan at all. That last point matters when the employer is shutting down or liquidating; see what employees are owed in a bankruptcy.
Is a Marketplace plan cheaper than COBRA?
Often it can be, because Marketplace plans come with premium tax credits based on household income, while COBRA has no federal subsidy. Being offered COBRA does not make you ineligible for those credits.
Losing job-based coverage opens a Special Enrollment Period: you can pick a Marketplace plan within 60 days before or after the loss of coverage. HealthCare.gov’s COBRA page adds a rule that catches people out: voluntarily dropping COBRA in the middle of the year does not open a new Special Enrollment Period. Once you are on COBRA, you can switch to a Marketplace plan during Open Enrollment, when your COBRA runs out, or after another life event such as marriage or a birth.
| COBRA | Marketplace plan | |
|---|---|---|
| Doctors and network | Same plan and network as before | New plan; network may differ |
| Deductible progress | Amounts already met during the plan year carry over | Starts again under the new plan |
| Cost | Up to 102% of the full premium, no tax credit | Premium tax credits based on income |
| Window to sign up | At least 60 days from notice or loss of coverage | 60 days before or after losing job coverage |
| Leaving mid-year | Dropping it does not open a Marketplace enrollment window | Can change at Open Enrollment |
HealthCare.gov lists Open Enrollment as November 1 to January 15 for states that use it, as of November 2026. States that run their own exchange can set different dates. A spouse’s employer plan is another option: under HIPAA you usually have 30 days after losing coverage to ask for special enrollment there.
What should you do in the first two weeks after a layoff?
- Ask HR for the exact date your health coverage ends; it is often the last day of the month you were laid off, but plans differ.
- Watch for the COBRA election notice, which names the administrator, premium and deadline. If it has not arrived about 45 days after your last day, contact the plan administrator.
- Get a Marketplace quote at HealthCare.gov or your state exchange so you can compare monthly cost after tax credits.
- Check whether your severance agreement pays any part of COBRA and for how many months.
- File for unemployment at the same time; our guide to unemployment benefits after a layoff explains how severance can affect it.
Bottom line
If you have expensive care scheduled, such as a surgery or a pregnancy, compare total out-of-pocket cost along with premiums: the deductible you already met this year stays with you on COBRA but resets on a new plan. For questions about your specific notice, the Department of Labor’s Employee Benefits Security Administration answers COBRA questions at 1-866-444-3272.
FAQ
Can my employer refuse COBRA after a layoff?
Only in narrow cases: if the employer has fewer than 20 employees, if the plan is a church or federal plan, or if you were fired for gross misconduct. A plan that denies COBRA must send a written notice of unavailability within 14 days explaining why.
Do I have to pay COBRA premiums the day I sign up?
No. The plan cannot require payment when you elect, and it must give you at least 45 days after the election to pay the first premium, which covers the months back to your loss of coverage.
Can I keep COBRA for my family but not myself?
Yes. Each qualified beneficiary has an independent right to elect, so a spouse or child can take COBRA even if the former employee chooses a Marketplace plan or another job’s coverage.
What happens to COBRA if my former employer closes?
If the employer stops maintaining any group health plan, COBRA coverage ends, because there is no plan left to continue. You would then use a Marketplace Special Enrollment Period or a spouse’s plan.
