COBRA lets you keep your employer health insurance after leaving a job — but you pay the full employer and employee premium plus 2 percent. Here is when COBRA makes sense and when alternatives are better.
How Much Does COBRA Health Insurance Cost in 2026
COBRA is expensive because you pay the full cost of your employer group plan — both the employer's and employee's share — plus up to 2 percent administrative fee. The average employer group plan costs $8,951 per year for individual coverage ($746 per month). Your employer likely covered 70–80 percent of this. Under COBRA you pay 100 percent plus 2 percent. The average COBRA individual premium is $722 per month and average COBRA family premium is $2,036 per month.
When COBRA Is Actually Worth It
COBRA makes sense in specific situations: if you have an ongoing medical condition being actively treated and switching plans mid-treatment would be disruptive; if you have met a significant portion of your annual out-of-pocket maximum and switching would reset it; if you are between jobs for 1–2 months and want simplicity without switching plans; or if your income is too high to qualify for meaningful ACA premium tax credits.
ACA Marketplace as a COBRA Alternative
Most people who leave a job qualify for a Special Enrollment Period on the ACA marketplace — you have 60 days from losing coverage to enroll. ACA marketplace plans may be dramatically cheaper than COBRA, especially if your post-job income qualifies for premium tax credits. A person earning $40,000 after leaving their job might pay $0–$150 per month on the ACA marketplace versus $722 per month for COBRA.
The COBRA Retroactive Election Strategy
You do not need to decide about COBRA immediately. You have 60 days from notification to elect COBRA, and coverage is retroactive to the day your previous coverage ended. This means if you become seriously ill in the first 60 days after leaving your job, you can retroactively elect COBRA to cover those medical bills — then pay the back premiums owed. This strategy is only worthwhile if medical costs exceed the retroactive COBRA premiums due.
COBRA for Dental and Vision
COBRA typically extends to dental and vision coverage that were part of your employer benefits, not just medical. If you have ongoing dental work or need eye exams and glasses, keeping COBRA dental and vision coverage while finding cheaper medical coverage elsewhere may be the most cost-effective strategy.