Compute your full COBRA premium and compare to ACA marketplace alternatives.
Monthly COBRA premium
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COBRA total over period
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ACA total over period
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Savings by choosing the cheaper option
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The premium shock after a job ends
While you are employed, your paycheck only shows your slice of the health insurance premium. Your employer quietly pays the larger share, often two-thirds or more, and you never see it. COBRA, the federal continuation law, lets you keep that exact same plan after you leave, but the arrangement that hid the true cost disappears. Now you pay the whole premium, your old share plus the employer's share, plus an administrative fee of up to 2 percent. This tool reconstructs that full unsubsidized cost so the number does not blindside you, and it stacks COBRA against a marketplace alternative over the months you actually need coverage.
The reason COBRA feels so brutal is purely arithmetic. The coverage is identical, the network is identical, your deductible carries over. The only thing that changed is who writes the check. Seeing the employer subsidy made explicit is often the moment people realize how much of their compensation was riding in their benefits.
Six months of coverage, two paths
Run the defaults. At your job you paid $200 a month and your employer paid $800, so the underlying premium is $1,000. COBRA adds the 2 percent administrative fee, making the full premium $1,000 times 1.02, which is $1,020 a month. That is 5.1 times what you used to pay out of pocket, the sticker shock in a single figure. Over the 6 months you need coverage, COBRA totals $1,020 times 6, or $6,120. A marketplace plan at $450 a month, after any income-based subsidy, totals $450 times 6, or $2,700. Choosing the marketplace plan saves $6,120 less $2,700, which is $3,420 over the half year.
| Step | Amount |
|---|---|
| Your share at the job | $200 per month |
| Employer share | $800 per month |
| Full premium plus 2 percent admin fee | $1,020 per month |
| COBRA over 6 months | $6,120 |
| Marketplace plan over 6 months | $2,700 |
| Savings by choosing the marketplace | $3,420 |
COBRA against the marketplace
The chart lays the two six-month totals side by side. COBRA towers over the subsidized marketplace plan, and the teal bar marks the cheaper choice. For most people leaving a job with reduced income, a marketplace plan with a premium tax credit wins by a wide margin, which is exactly what this comparison is built to surface.
When COBRA still makes sense, and the deadlines that bite
This tool is for anyone facing a job loss, a reduction in hours, or another qualifying event, who must decide fast between continuing their plan and shopping the marketplace. Despite the cost, COBRA is sometimes the right call. The clearest case is mid-treatment care: if you are partway through a course of treatment with a specific doctor, or have already met a large chunk of your deductible for the year, keeping the identical plan can be worth the premium. A practical tip few people know: losing job-based coverage triggers a special enrollment period, so you are not stuck waiting for open enrollment to buy a marketplace plan.
Watch the timing carefully. You generally have 60 days to elect COBRA, and crucially, COBRA is retroactive to the date your coverage ended. That means you can sometimes wait, stay uninsured on paper, and only elect COBRA if a medical bill actually lands within the window, paying the back premiums then. It is a calculated gamble that can save a healthy person thousands. On taxes, marketplace premiums may qualify for the premium tax credit reconciled on Form 8962, and a job loss that cuts your annual income often unlocks a far larger subsidy than you would expect, which is why the marketplace so often wins. Out-of-pocket medical costs, including some premiums, may also be deductible under the rules in IRS Publication 502 if you itemize and clear the income threshold.
Can I drop COBRA later and switch to a marketplace plan?
Yes, but mind the timing. Voluntarily dropping COBRA mid-stream does not by itself open a special enrollment period, so you may have to wait for open enrollment to buy a marketplace plan. Exhausting your COBRA coverage, on the other hand, does qualify you for a special enrollment. The cleanest approach is usually to compare both at the start and pick the marketplace then if it is cheaper, rather than electing COBRA and trying to switch later.
Does COBRA cover my dependents too?
Yes. Spouses and dependent children who were on your employer plan have independent COBRA rights and can continue coverage, sometimes even electing it separately from you. Certain events, such as divorce or the death of the covered employee, can extend a dependent's continuation period up to 36 months rather than the usual 18.
Why is there a 2 percent administrative fee?
Federal law lets the plan charge up to 102 percent of the full premium, with that extra 2 percent covering the cost of administering continuation coverage. It is why this calculator multiplies the combined employee and employer premium by 1.02. In certain disability-based extensions beyond 18 months, the law permits charging up to 150 percent, so a long COBRA tail can cost even more than the headline figure here.