This article is for general educational purposes and is not insurance, tax, or legal advice; verify plan-specific figures with your plan administrator or a licensed broker before deciding. Premium figures reflect 2025 employer-survey data and 2026 marketplace data as noted at each figure’s first mention.
TL;DR — Quick Verdict
- COBRA lets you keep your exact employer plan, but you pay the full premium plus a 2% administrative fee — up to 102% of the total cost. In 2025 that averaged $9,325/year for single coverage and $26,993/year for family coverage (KFF).
- Marketplace plans are usually cheaper if you qualify for a premium tax credit — but the enhanced credits expired December 31, 2025, so 2026 subsidies are smaller than they were in 2021–2025.
- KFF estimates average annual premium payments for subsidized marketplace enrollees rose 114% for 2026, from $888 to $1,904 — a swing that changes the math for anyone near the old 400% income cliff.
- Comparison result: If your household income is low-to-moderate and you have no urgent mid-year care, the marketplace usually wins; if you’ve already met your deductible or are mid-treatment, COBRA’s plan continuity often wins.
- Recommendation: Price a marketplace plan at HealthCare.gov before electing COBRA — you have 60 days either way, and electing COBRA does not forfeit your marketplace special enrollment window.
Roughly 154 million Americans get health coverage through an employer, according to KFF’s 2025 Employer Health Benefits Survey — which means a layoff doesn’t just cost a paycheck, it detonates the health plan attached to it. The decision that follows is one of the most expensive most people never rehearse: keep the employer plan through COBRA, or buy a plan through the Affordable Care Act marketplace. The stakes moved sharply on January 1, 2026, when the enhanced premium tax credits that made marketplace coverage unusually cheap since 2021 expired. That single change reshuffled which option is cheaper for millions of households. This guide runs the actual numbers on both paths using DOL, CMS, and KFF primary data, walks through two realistic cost scenarios, names the deadlines that quietly cost people thousands, and gives you conditional logic for deciding. If you’re weighing this alongside other coverage routes, it pairs with our look at health coverage options for the self-employed and short-term plan coverage and exclusions.
What COBRA Actually Costs in 2026
COBRA doesn’t give you a discounted plan — it gives you the same plan at its true, un-subsidized price. While employed, your employer covered most of the premium; under COBRA, that subsidy vanishes and you inherit the whole bill. Federal law lets the plan charge up to 100% of the total premium plus a 2% administrative fee, for a ceiling of 102% (CMS). During a disability extension, that ceiling rises to 150%.
The “total premium” is the number most people never see on a pay stub. KFF’s 2025 survey puts the average full employer-sponsored premium at $9,325 per year for single coverage and $26,993 per year for family coverage. Workers themselves contributed an average of only $1,440 (single) and $6,850 (family) — meaning the jump to the full COBRA rate can quadruple what came out of your paycheck.
Full premiums from KFF 2025 Employer Health Benefits Survey; 2% fee applied per CMS COBRA rules. Author calculation of 102% ceiling and monthly figures. Verify at kff.org and cms.gov.
Your actual COBRA premium will differ from these averages because it mirrors your specific plan. To estimate it precisely, check Box 12, Code DD on your most recent W-2, which reports the total annual cost of your employer coverage. Understanding how your plan’s deductible and out-of-pocket maximum mechanics interact with that premium matters just as much as the headline number.
What Marketplace Coverage Costs After the 2026 Subsidy Change
Marketplace pricing works in the opposite direction from COBRA: the sticker premium is often high, but a premium tax credit can slash what you actually pay based on household income. The catch for 2026 is that the enhanced premium tax credits — enacted in 2021 and extended through 2025 by the Inflation Reduction Act — expired on December 31, 2025 (Congressional Research Service). The underlying credit still exists, but the temporary expansion that removed the 400%-of-poverty income cap and enlarged subsidies at every income level is gone unless Congress acts.
The dollar impact is significant. KFF estimated that average annual premium payments for subsidized marketplace enrollees would rise 114% for 2026 — from $888 to $1,904 — to keep the same plan. Separately, KFF’s early 2026 marketplace data showed the average monthly net premium across all enrollees climbing 58%, from $113 to $178. Many enrollees responded by shifting to bronze-tier plans with lower premiums and higher deductibles.
Even with smaller subsidies, a subsidized marketplace plan frequently costs far less than the $793/month average single COBRA figure above. Whether you qualify — and how much you save — depends on your projected annual income, which for a newly unemployed person is often much lower than last year’s. Our breakdown of ACA marketplace subsidy eligibility and savings walks through the income bands, and if your state expanded coverage you may land in state Medicaid expansion eligibility at no premium at all.
COBRA vs Marketplace: Which Is Better After Job Loss?
Neither option is universally cheaper — the right answer turns on income, where you are in your care year, and how long the gap will last. Consider two households, each losing single coverage on an average plan.
Scenario 1 — Alex, projected 2026 income $38,000, no pending medical care. COBRA would run about $793/month ($9,512/year). At roughly 250% of the federal poverty level, Alex still qualifies for a meaningful marketplace premium tax credit even under 2026 rules, likely landing on a silver plan for a fraction of the COBRA cost. The marketplace wins decisively, and switching means a fresh deductible — a manageable trade for someone not mid-treatment.
Scenario 2 — Jordan, mid-chemotherapy, already met a $4,000 deductible in March. Jordan loses coverage in July. Electing COBRA preserves the exact provider network, the specialist relationships, and — critically — the deductible and out-of-pocket spending already accumulated for the year. A new marketplace plan resets that accumulator to zero, potentially costing thousands in restarted cost-sharing on top of premiums. Here COBRA’s higher premium can still be the cheaper total. This is the core reason to weigh plan comparison beyond the monthly premium, and it’s amplified for anyone doing plan selection with a chronic condition.
Verdict
For most people with low-to-moderate projected income and no urgent, in-progress care, a subsidized marketplace plan is the cheaper choice even after the 2026 subsidy reduction. COBRA earns its higher price only when plan continuity has concrete value — you’re mid-treatment, you’ve already met your deductible, or you need to keep a specific specialist who isn’t in any affordable marketplace network. Run both numbers before your 60-day window closes rather than defaulting to whichever notice arrives first.
The Deadlines That Quietly Cost People Thousands
Timing rules decide this more often than premiums do. Both paths open a 60-day window, and misunderstanding how they overlap is where money leaks.
For COBRA, you have 60 days from the later of your coverage-loss date or the date your election notice is provided to elect coverage, and then 45 days after electing to make your first payment (DOL). COBRA is retroactive — if you elect within the window, coverage restarts back to the date it lapsed, so you can wait, stay uninsured on paper, and only elect if you incur a claim. For the marketplace, losing job-based coverage triggers a special enrollment period: you must select a plan within 60 days of losing coverage (HealthCare.gov), and you can apply up to 60 days before a known loss to avoid any gap.
The trap: electing COBRA and later changing your mind does not automatically reopen the marketplace special enrollment window. You generally can switch to a marketplace plan only during open enrollment (November 1–January 15) or when your COBRA runs out — not simply because you decided COBRA is too expensive. That’s why pricing the marketplace first matters. Coverage duration also differs: COBRA lasts 18 months for job loss, extends to 29 months with a disability determination, and reaches 36 months for certain secondary events (DOL). Avoiding these missteps overlaps heavily with the costly open enrollment mistakes to avoid.
What Most People Get Wrong
Three errors show up repeatedly, and each carries a measurable price tag.
Mistake 1: Electing COBRA reflexively because it’s familiar. The consequence is often paying the full $793/month single average when a subsidized marketplace plan would cost a fraction. The correct action is to get a marketplace quote at HealthCare.gov using your projected — not prior-year — income before you sign the COBRA election.
Mistake 2: Ignoring the reset deductible when switching mid-year. Dropping COBRA or a met-deductible employer plan for a new marketplace plan restarts your out-of-pocket accumulator at zero. The consequence can be thousands in re-paid cost-sharing. The correct action is to total what you’ve already spent this year and factor that into the comparison, especially mid-treatment.
Mistake 3: Underestimating income and facing a tax-time clawback. Advance premium tax credits reconcile on your tax return; if you earn more than projected, you may repay part of the subsidy. The correct action is to update your marketplace income estimate whenever your situation changes, and to understand how an HSA paired with a high-deductible plan can lower taxable income if you land on an HSA-eligible plan.
Is COBRA Ever Worth It? Who Should Choose Each Path
Use conditional logic rather than a blanket rule. COBRA is worth its premium when at least one of these holds: you’ve already met a substantial deductible or out-of-pocket maximum this plan year; you’re mid-treatment with a specialist who isn’t in an affordable marketplace network; your gap is short (a job starts in a few weeks) and continuity beats paperwork; or your projected income is high enough that you’d get little or no marketplace subsidy anyway. In that last case, the full-price marketplace premium and the full-price COBRA premium may be close, and COBRA keeps your existing plan.
The marketplace is the stronger choice when your projected 2026 income qualifies you for a premium tax credit, when you have no urgent in-progress care, when you expect the coverage gap to last many months, or when you want to right-size your plan type rather than keep whatever your employer offered. Comparing an HMO, PPO, or HDHP on total annual cost and running a plan selection break-even calculation will surface the true cheapest option for your usage. Early retirees under 65 face a distinct version of this decision — our guide to coverage options for early retirees covers the wrinkles Medicare timing adds.
Frequently Asked Questions
Can I switch from COBRA to a marketplace plan whenever I want?
Not freely. Per HealthCare.gov, you can move from COBRA to a marketplace plan during open enrollment (November 1–January 15) or when your COBRA coverage runs out, which triggers a new special enrollment period. Voluntarily dropping COBRA because it’s expensive does not, on its own, open a marketplace special enrollment window — which is why you should price the marketplace within your original 60-day window after job loss.
How much cheaper is the marketplace than COBRA in 2026?
It depends on income. COBRA single coverage averaged about $793/month in 2025 (KFF full-premium data plus the 2% fee). A subsidized marketplace enrollee paid an average of $178/month net in early 2026 per KFF, though subsidies shrank when the enhanced premium tax credits expired December 31, 2025. If you qualify for a premium tax credit, the marketplace is usually far cheaper; if you don’t, the two can be close.
Does electing COBRA start a new deductible?
No. COBRA continues your exact employer plan, so any deductible and out-of-pocket spending you’ve already accumulated this plan year carries over. Switching to a new marketplace plan instead resets those accumulators to zero. For someone who has already met a $4,000 deductible mid-year, that continuity is a major reason COBRA’s higher premium can still produce a lower total cost.
How long do I have to decide after losing my job?
You generally have 60 days to elect COBRA, measured from the later of your coverage-loss date or your election-notice date, plus 45 days after electing to make the first payment (DOL). The marketplace special enrollment period also runs 60 days from your coverage loss, and you can apply up to 60 days before a known loss. COBRA is retroactive, so you can wait and elect only if you incur a claim.
How We Researched This Article
This analysis draws exclusively on primary federal and institutional sources, supplemented by calculations we performed and label as such. Full employer-sponsored premium averages ($9,325 single, $26,993 family) and worker contribution averages ($1,440 single, $6,850 family) come from the KFF 2025 Employer Health Benefits Survey, a survey of 1,862 firms. COBRA’s 102% premium ceiling, the 2% administrative fee, and the 150% disability-extension rate come from the CMS COBRA fact sheet and the DOL COBRA FAQs, which also supply the 60-day election window, 45-day payment window, and 18/29/36-month durations.
Marketplace figures reflect the post-2025 subsidy landscape. The expiration of the enhanced premium tax credits on December 31, 2025 is documented by the Congressional Research Service. The estimated 114% increase in average subsidized premium payments ($888 to $1,904) and the 58% rise in average net monthly premiums ($113 to $178) come from KFF’s early-2026 marketplace analyses. Special enrollment rules are drawn from HealthCare.gov (verify at healthcare.gov).
Where we combined sources — applying the 2% fee to KFF premium averages, or converting annual figures to monthly — those are clearly labeled author calculations and are modeled, not measured; your plan’s actual premium will differ and should be confirmed via W-2 Box 12 Code DD or your plan administrator. Marketplace subsidy amounts are inherently income-specific and cannot be quoted as a single figure. This research was last conducted July 2026; the enhanced-subsidy status remains subject to congressional action. All figures were verified against named primary sources before publication.