Losing job-based health coverage is stressful enough without having to navigate complex insurance decisions at the same time. Both COBRA and ACA marketplace coverage are available to you — but they’re very different in cost and coverage. Here’s how to decide.
What Is COBRA?
COBRA (Consolidated Omnibus Budget Reconciliation Act) allows you to continue your employer-sponsored health plan after leaving a job. You keep the exact same coverage and network — but you pay the full premium (both the employee and employer share) plus a 2% administrative fee.
Most people are shocked at the full COBRA premium. If your employer was paying $800/month and you were paying $200, COBRA costs you roughly $1,020/month for the same coverage.
What Is the Marketplace Alternative?
Losing job-based coverage is a qualifying life event that gives you a 60-day Special Enrollment Period to enroll in an ACA marketplace plan. Depending on your income during the period you’re uninsured (or newly self-employed), you may qualify for substantial premium tax credits.
When COBRA Makes Sense
- You have ongoing care with specific doctors who are in-network on your current plan and not on marketplace alternatives
- You’re in the middle of treatment and a plan switch would be disruptive
- Your income is too high to qualify for marketplace subsidies
- You expect to return to employer-sponsored coverage soon (COBRA gives you time without switching plans)
When the Marketplace Makes More Sense
- Your income will be lower during the transition period — subsidies could make marketplace plans dramatically cheaper than COBRA
- You don’t have existing in-network care relationships to protect
- You need coverage for an extended period and can’t afford COBRA premiums
The Smart Move
Get marketplace quotes before deciding. Many people assume COBRA is the only option and pay far more than necessary. A quick subsidy calculation often reveals that marketplace coverage costs a fraction of COBRA — sometimes 80–90% less.
Just lost job-based coverage? Contact Garden State Benefits and we’ll compare your real options within 24 hours.