What is COBRA, and what does it cost?
COBRA is a federal law that lets you keep your job’s health plan after you leave the job or lose hours. It applies to private employers with 20 or more employees and to state and local governments. Some states have “mini-COBRA” laws for smaller employers.
The U.S. Department of Labor’s COBRA FAQ sets these rules:
| COBRA rule | Detail |
|---|---|
| Price | Up to 102% of the full plan cost, including the share your employer paid |
| Disability extension | Up to 150% of the plan cost in the extra months |
| How long | 18 months after a job loss or cut in hours; up to 29 with a disability extension; up to 36 for divorce, death or a second qualifying event |
| Time to elect | 60 days from the later of the coverage end date or the election notice |
| First payment | Due within 45 days of electing; later payments have a 30-day grace period |
| Start date | Retroactive to the day the job’s plan ended |
Can you get a tax credit with COBRA?
No premium tax credit applies to any month you’re enrolled in COBRA. The rule is 26 CFR 1.36B-2(c)(3)(iv): continuation coverage counts against the credit only in months you’re actually enrolled in it.
Being offered COBRA doesn’t block the premium tax credit. If you turn COBRA down, you can get the credit on a Marketplace plan when your household income is between 100% and 400% of the poverty line. Over 400%, the 2027 subsidy cliff means no credit at any price.
How does COBRA compare with a Marketplace plan in 2027?
COBRA and a Marketplace plan differ on price, savings and what carries over. This table sets them side by side as of October 26, 2026:
| COBRA | Marketplace plan | |
|---|---|---|
| Monthly price | Up to 102% of the full plan cost | Set by the plan, minus any tax credit |
| Premium tax credit | None while enrolled | Yes, from 100% to 400% of the poverty line |
| Cost-sharing reductions | No | Yes, on silver plans up to 250% of the poverty line |
| Doctors and network | Same as the job’s plan | New plan, new network |
| Deductible already met this year | Carries over | Starts over |
| How long | 18 months for most people | As long as you renew each year |
| When to sign up | 60 days to elect | 60 days after losing job coverage, or open enrollment |
How much more does COBRA cost in dollars?
KFF’s 2026 Employer Health Benefits Survey, released October 22, 2026, put the average yearly premium at $9,804 for single coverage and $28,303 for family coverage. Workers paid $1,672 and $7,471 of that on average. At COBRA’s 102%, Coverage Decider worked out:
| Coverage | Average worker share, 2026 | COBRA at 102% of the average premium |
|---|---|---|
| Single | $139.33 a month | $833.34 a month |
| Family | $622.58 a month | $2,405.76 a month |
Monthly figures are the yearly amounts divided by 12, rounded to the cent. Your own COBRA notice gives your real price.
What would a Marketplace plan cost instead?
With the tax credit, a household pays no more than a set share of its income for the benchmark silver plan. The 2027 shares come from IRS Rev. Proc. 2026-26. Coverage Decider worked these out from the 2026 poverty guideline ($15,960 for one person, $33,000 for four, 91 FR 1797):
| 2027 household | Income | Share of income | Most you pay for benchmark silver |
|---|---|---|---|
| 1 person, 200% of the poverty line | $31,920 | 6.78% | $180.35 a month |
| 1 person, 300% | $47,880 | 10.22% | $407.78 a month |
| 1 person, 400% | $63,840 | 10.22% | $543.70 a month |
| 4 people, 300% | $99,000 | 10.22% | $843.15 a month |
Each figure is income times the share, divided by 12 and rounded to the cent. Over 400% of the poverty line, 26 U.S.C. 36B allows no credit in 2027, so you pay the full Marketplace price. Bronze plans usually cost less than benchmark silver.
When can you switch from COBRA to a Marketplace plan?
Losing job-based coverage opens a 60-day Special Enrollment Period on HealthCare.gov, under 45 CFR 155.420(d)(1). It opens whether or not you’re offered COBRA. After that, the windows are:
- Open enrollment. From November 1, 2026 to January 15, 2027, you can leave COBRA and pick a 2027 Marketplace plan for any reason. Pick by December 15 for coverage on January 1. See 2027 open enrollment dates.
- COBRA runs out. The end of COBRA is a loss of coverage. You can pick a plan up to 60 days before or 60 days after.
- Your employer stops paying its share. If an employer or a government subsidy stops paying all of the COBRA cost, that opens a window too (45 CFR 155.420(d)(15)).
Dropping COBRA early or stopping payment isn’t a loss of coverage under 45 CFR 155.420(e). HealthCare.gov’s COBRA page says you’d wait until the next open enrollment. Special enrollment periods in 2027 lists the other life events that open a window.
When does COBRA make more sense?
COBRA can be the better choice in a few cases:
- Income over 400% of the poverty line. Under 26 U.S.C. 36B, no tax credit applies in 2027, so compare COBRA with the full Marketplace price.
- A deductible already met. Late in the year, staying on COBRA can avoid starting a new deductible.
- Treatment in progress. COBRA keeps the same doctors, hospitals and drug list.
- A short gap. If a new job’s coverage starts soon, COBRA can bridge it.
A Marketplace plan usually wins when 2027 income is under 400% of the poverty line, the credit limit in 26 U.S.C. 36B. It also wins when you’d lose the employer’s share and pay COBRA’s full price for months.
Near 65, COBRA carries a Medicare risk. Medicare.gov says COBRA doesn’t count as job coverage for Medicare’s 8-month Special Enrollment Period, so signing up for Part B late can bring a penalty. Turning 65 on a Marketplace plan has the dates.
What mistakes cost people the credit?
Two COBRA mistakes can cost people their 2027 tax credit:
- Electing COBRA after getting a credit. COBRA is retroactive. Electing it over months when you had advance credit payments turns those months into COBRA months, and the credit for them is paid back at tax time. From tax year 2026, repayment has no cap.
- Waiting past 60 days. Miss the window after the job plan ends and you may wait for open enrollment, unless another life event applies.
How do you compare your own numbers?
Estimate your 2027 income for the whole year, including wages before the job ended, unemployment benefits and taxable severance. What counts as income for the ACA lists what to include.
Then run Coverage Decider’s calculator to see your 2027 tax credit and plan prices, and compare them with your COBRA notice. How we calculate lists the rules it uses.
Where do you get the final word?
Rules here are as of October 26, 2026, and this is not legal or tax advice. HealthCare.gov decides your eligibility and your enrollment window. Your COBRA notice gives your real price and deadlines. Free local help can check your situation at no cost.