COBRA keeps your exact work plan, but you usually pay the full premium your employer used to subsidize, and that number shocks people. The five main alternatives are a marketplace plan (often with a subsidy), a spouse's employer plan, a parent's plan if you're under 26, Medicaid, and Medicare if you're 65 or older. Each one has its own deadline, and most of the deadlines start the day your work coverage ends, so it pays to decide in the first few weeks.
For most people leaving a job, this is the first comparison to run. Losing job-based coverage is a qualifying life event, so you get a 60-day Special Enrollment Period. You can even apply up to 60 days before the coverage ends, so the new plan starts right after the old one, with no gap.
The difference from COBRA is the subsidy. COBRA has no premium tax credit. A marketplace plan does, for households roughly between 100% and 400% of the federal poverty level, based on your income for the whole year. If you're out of work for part of the year, that annual figure may be lower than you'd guess. Count everything, though: severance, unemployment benefits, and any income from a new job later in the year. The subsidy calculator takes about a minute.
Two rules people trip on:
For a side-by-side of the two, with your numbers plugged in, use COBRA vs. marketplace.
Your spouse's employer plan. If your spouse has coverage through work, losing your own job-based coverage is generally a special enrollment event for their plan too. Employer plans usually give you at least 30 days from the loss of coverage to be added, which is shorter than the marketplace's 60. Check with their HR department right away, because the window is set by the plan.
Don't assume it's the cheaper choice. Some employers subsidize the employee's coverage generously but not the spouse's or family's, and a few add a surcharge for a spouse who could get coverage elsewhere. Compare the added payroll deduction against the marketplace price after any subsidy. Also, if the employer plan's family coverage is offered to you, check how that affects marketplace subsidy eligibility. The employer coverage checker walks through that test.
A parent's plan. If you're under 26, plans that offer dependent coverage generally have to let you stay on a parent's plan until you turn 26, whether you're married, living at home, in school, or financially independent. Losing your own job-based coverage usually lets you rejoin a parent's employer plan through special enrollment, again usually within about 30 days. If your parent has a marketplace plan, you can generally be added during your own Special Enrollment Period.
The catch is the age-out date. If you'll turn 26 soon, you'll be making this decision again in a few months. Turning 26 walks through what happens at that birthday.
Medicaid is the alternative people overlook after leaving a job, usually because they assume their old salary rules them out. But Medicaid generally looks at your current monthly income, not last year's tax return. If the paychecks have stopped, you may qualify now even if you wouldn't have three months ago. There's no enrollment window: you can apply any month.
Eligibility depends heavily on your state. Some states expanded Medicaid to most adults with low incomes, and others mostly cover children, pregnant women, people with disabilities, and older adults. Children often qualify for Medicaid or CHIP at higher household incomes than their parents. The Medicaid eligibility checker gives you a first read, and the state application is the real answer. Applying costs nothing, and if you don't qualify, the application can often be sent on to the marketplace.
If you're 65 or older and leaving a job, Medicare is the option to sort out first. When employment ends, you generally get an 8-month Special Enrollment Period to sign up for Part B without a penalty. That clock starts when the job or the job-based coverage ends, whichever comes first. COBRA doesn't pause it. Medicare doesn't treat COBRA as coverage from current employment, so people who stay on COBRA past that 8-month window can end up with a late-enrollment penalty added to their Part B premium for as long as they have it. The Medicare penalty calculator shows what a delay would cost, and working past 65 covers the timing in more detail.
There's also a marketplace angle: once you're eligible for premium-free Part A, you generally can't get a marketplace subsidy, so the marketplace usually isn't a real alternative at 65 and over.
COBRA isn't always the wrong answer. It can make sense when:
One more thing about the COBRA election: you usually have 60 days to elect it, and coverage is retroactive to the day your work plan ended once you elect and pay. Some people use that as a short safety net while they compare other options. It's a legitimate strategy, but you'd owe the back premiums if you elect, so read your election notice and don't let the deadline slip.
If you'd like a second set of eyes on the comparison, I do this for free, and premiums are the same with or without an agent: (561) 660-9102, or check your enrollment window first.
Yes. Losing job-based coverage opens a 60-day Special Enrollment Period whether or not you're offered COBRA, and turning COBRA down doesn't affect it. You can apply up to 60 days before your work coverage ends to avoid a gap.
Within your original 60-day window after losing work coverage, generally yes. After that, voluntarily dropping COBRA usually isn't a qualifying event. You'd switch during open enrollment, which starts November 1, or when your COBRA period runs out.
No. Being offered COBRA doesn't affect your subsidy eligibility. Being enrolled in COBRA does: you can't get a premium tax credit for months you're covered by COBRA.
Usually at least 30 days from the date your coverage ended. The exact window is set by your spouse's employer plan, so ask HR right away.
Be careful. COBRA doesn't count as employment coverage for delaying Medicare Part B, so your 8-month window to enroll without a penalty starts when your job or job-based coverage ends. Sort out Part B first, then decide whether COBRA has any role.
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Important: This article is general information, not insurance, legal, tax, or medical advice. Coverage details vary by plan, carrier, state, and county, and change over time — always confirm benefits with the specific plan documents or a licensed agent before making decisions. Smooth Health Solutions is not connected with or endorsed by the U.S. government, the federal Medicare program, CMS, HealthCare.gov, or any state marketplace or government agency.