COBRA vs Marketplace
Health Insurance Calculator

COBRA (Consolidated Omnibus Budget Reconciliation Act) is a US federal law that lets you temporarily keep your employer's group health plan after a qualifying event such as job loss or reduced hours. You keep the exact same doctors, network, deductible progress, and benefits you had as an employee. The catch: you pay the entire premium yourself — the share your employer used to pay plus the share you paid — plus an administrative fee of up to 2%. Your employer notifies the plan administrator, you get an election notice, and you have at least 60 days to decide.

Because you pay the full premium plus up to a 2% admin fee, COBRA insurance typically costs 3 to 5 times what was deducted from your paycheck as an employee. For one person that commonly lands around $400 to $700 per month, and for family coverage (family of 3, 4, or more) often $1,200 to $2,000 or more per month, depending on the plan. Premiums also vary by state — in California, for example, check whether Cal-COBRA (the state's mini-COBRA law for employers with 2–19 workers, up to 36 months) applies to you. The exact number for your plan is printed on your COBRA election notice — enter it in the calculator above as the full monthly plan cost and the tool adds the admin fee for you.

For the most common qualifying events — termination of employment and reduction of hours — federal COBRA lasts up to 18 months. Retiring and losing your group coverage counts the same way: up to 18 months. Other qualifying events (divorce or legal separation, death of the covered employee, Medicare entitlement, or a child losing dependent status) allow up to 36 months. A disability extension can stretch coverage to 29 months total. Some states also have “mini-COBRA” laws for employers with fewer than 20 workers, with their own duration rules — California's Cal-COBRA, for instance, can bring the total to 36 months.

For most people who qualify for premium tax credits, a Marketplace (ACA) plan is cheaper — often dramatically so, because the subsidy is based on your income while COBRA charges the full group premium. Marketplace plans are individual-market plans (sometimes called private or open-market plans), so “COBRA vs private health insurance” is the same comparison. But COBRA can win in specific situations: your income is too high for subsidies, you already met most of your employer plan's deductible for the year, you take medications tied to that plan's formulary, or you only need coverage for a few months. This “which is better” debate comes up constantly on forums like Reddit's r/personalfinance — and the honest answer is that it depends on your numbers, which is exactly what the calculator above settles over the full 18 months, including deductibles and out-of-pocket maximums.

No. Premium tax credits cannot be used to pay COBRA premiums — this is a common and expensive misunderstanding. If you are eligible for both, it is an either-or choice: take the premium tax credit on a Marketplace plan, or pay the full COBRA premium yourself with no subsidy. The subsidy estimator in this tool shows what credit you might qualify for on a Marketplace plan only.

Your COBRA coverage ends, but losing it is a qualifying life event that triggers a 60-day Special Enrollment Period to buy a Marketplace plan — you will not be stuck uninsured if you act in time. If you know the end date in advance, you can also shop during the regular Open Enrollment Period. Note that you generally cannot switch from COBRA to a subsidized Marketplace plan mid-stream just because you feel like it; voluntary drop of COBRA is not a qualifying event in most cases.

Yes. Losing job-based coverage is a qualifying life event that gives you a 60-day Special Enrollment Period to enroll in a Marketplace plan — the window runs 60 days before or after your coverage ends. Separately, you have at least 60 days to elect COBRA after receiving your election notice, and COBRA election can be retroactive to the date your coverage ended. The two clocks run independently, so read both notices carefully.

Yes to both. Involuntary termination (layoffs) and voluntary quits are both qualifying events, as long as the termination was not for gross misconduct. Reduction of work hours also qualifies. The employer-size rule matters more than the reason: federal COBRA applies to private employers with 20 or more employees. Smaller employers may be covered by state mini-COBRA laws instead.

Sometimes — and there is a little-known timing quirk: you have at least 60 days to elect COBRA and 45 more days to make the first payment, and coverage is retroactive. Some people between jobs use this as a bridge, electing only if medical care is needed during the gap. The risks are real though: miss a deadline and the bridge disappears, and a subsidized Marketplace plan is often cheaper for the same months. Run both scenarios in the calculator, especially the “months of COBRA remaining” sensitivity.

Federal law lets the plan charge up to 102% of the group premium: the full cost of coverage plus a 2% administration fee. During the 11-month disability extension, the cap rises to 150% of the premium. The fee is set by the plan — most charge the full 2% — and it is already included in the monthly amount on your election notice. In this calculator, enter the base plan cost and the tool applies the admin percentage (capped at 2%) for you.

Yes. A Marketplace plan is a brand-new policy: its deductible and out-of-pocket maximum start at zero, and nothing you already paid toward your employer plan's deductible transfers over. This reset is one of the hidden costs of switching mid-year, and this calculator models it — medical costs are computed per 12-month plan segment, so a mid-year switch starts a fresh deductible in the math, just like in real life.

Yes, both. COBRA simply continues your existing employer group coverage, which already covered you. Marketplace plans under the Affordable Care Act cannot deny coverage or charge you more because of a pre-existing condition, and they must cover the ten essential health benefits. Neither option has a waiting period for pre-existing conditions.

For employees: termination of employment (voluntary or involuntary, except gross misconduct) and reduction of hours. For spouses and dependent children, those plus: divorce or legal separation, the covered employee's death or Medicare entitlement, and a child losing dependent status. The employer must generally have had 20 or more employees on more than 50% of business days in the previous calendar year.

This tool produces educational estimates, not insurance or financial advice. Premiums, deductibles, and cost-sharing are simplified into an 18-month model; the subsidy estimator uses a simplified version of the ACA sliding scale and is not an official eligibility determination. Real costs depend on your specific plan documents, state rules, and current law — verify everything at healthcare.gov or with a licensed navigator or broker before enrolling.