Quick answer: After a layoff you have two main ways to keep health insurance: elect COBRA to stay on your old employer plan, or buy a Marketplace plan using the 60-day Special Enrollment Period that losing job-based coverage triggers (HealthCare.gov). COBRA keeps your doctors and deductible progress but usually costs the full premium plus 2% (DOL). Based on KFF's 2026 average single premium of $9,804 a year, that is roughly $833 a month (KFF EHBS 2026). If you are laid off between now and January 15, 2027, open enrollment for 2027 coverage is also running, so you can combine the two.
This guide is for U.S. workers who just lost, or are about to lose, job-based coverage and want to choose quickly without draining the money they need for the job search. If you are still reviewing your exit paperwork, read should I sign a severance agreement first, because some packages pay part of your COBRA premiums.
Why health insurance after a layoff is harder this year
Two things changed at the same time: layoffs kept coming, and individual health insurance got more expensive.
Layoffs are slower, but finding the next job takes longer. Challenger, Gray & Christmas counted 43,994 announced U.S. job cuts in October 2026 and 617,189 through October (Challenger October 2026 report). The BLS October jobs report showed payrolls up 165,000 and unemployment at 4.1%, but 27.6% of unemployed people had been out of work for 27 weeks or longer (BLS Employment Situation, Nov 6, 2026). Plan for coverage that lasts months, not weeks.
Marketplace subsidies shrank. The enhanced premium tax credits that ran from 2021 through 2025 expired at the end of 2025 (KFF). According to KFF's November 6, 2026 analysis, benchmark silver premiums are rising 13% on average for 2027, after a 26% rise for 2026. People with income above 400% of the federal poverty level now pay the full price (KFF, 9 Things to Watch for 2027 Open Enrollment).
Employer plans cost more too. KFF's 2026 Employer Health Benefits Survey puts the average annual premium at $9,804 for single coverage and $28,303 for family coverage, each up 5% from 2025 (KFF EHBS 2026). COBRA passes that whole cost to you.
The result: the "just take COBRA" default and the "the Marketplace is always cheaper" default are both wrong for a lot of people right now. You need to run your own numbers.
Your options at a glance
| Option | When it starts | How long it lasts | What you pay | Best for |
|---|---|---|---|---|
| COBRA | Retroactive to the day your plan ended, once you elect and pay | Usually up to 18 months after a layoff | Up to 102% of the plan's full cost | Ongoing treatment, a deductible you have mostly met, or a family member mid-care |
| Marketplace plan (Special Enrollment Period) | First day of the month after you pick a plan | Through the end of the plan year | Sticker price minus any premium tax credit | People whose expected income qualifies for a tax credit, or who rarely use care |
| Spouse's or parent's employer plan | First of the month after you enroll | As long as you are eligible | Their payroll contribution | Households with a second job-based plan |
| Medicaid or CHIP | Can start right away if eligible | While you qualify | Free or low cost | Little or no current income |
Sources: DOL worker's guide to COBRA, DOL COBRA FAQ, HealthCare.gov.
A few rules worth knowing:
- COBRA generally applies to private employers with 20 or more employees and to state and local governments. Many states have "mini-COBRA" laws for smaller insured employers (DOL COBRA FAQ).
- A spouse's or parent's plan usually gives you a 30-day special enrollment window after you lose coverage (same source). That is shorter than the 60-day COBRA and Marketplace windows.
- You can apply for Medicaid or CHIP at any time.
The deadlines that matter
Most mistakes here are timing mistakes. Put these dates on your calendar on the day you are notified.
| Deadline | Rule | Source |
|---|---|---|
| COBRA election notice | Plans must send it within 44 days after the qualifying event (or after coverage ends, if the plan extends it) | DOL COBRA FAQ |
| COBRA election | At least 60 days, counted from the later of the notice date or the date coverage ends | DOL worker's guide |
| First COBRA payment | At least 45 days after you elect | DOL worker's guide |
| Later COBRA payments | 30-day grace period after each due date | DOL COBRA FAQ |
| Marketplace Special Enrollment | Pick a plan within 60 days of losing job-based coverage | HealthCare.gov |
| 2027 open enrollment (HealthCare.gov states) | Nov 1, 2026 to Jan 15, 2027; choose by Dec 15 for a Jan 1 start | HealthCare.gov dates |
State-run marketplaces set their own end dates. For 2027 coverage, California, New Jersey, New York and Rhode Island run to January 31, and Idaho ends December 15 (healthinsurance.org). Check your state's exchange.
The retroactive COBRA window, explained carefully
Because COBRA is retroactive to the day you lost coverage, some people wait to elect it. If nothing happens, they never pay. If they need care, they elect within the window and pay back premiums. The DOL confirms that coverage is retroactive and that you have 45 days after electing to make the first payment. It also warns that coverage may not be active until that premium is paid (DOL COBRA FAQ).
That means pharmacies and doctors may see you as uninsured while you wait. This approach can work for a healthy single person who is close to an offer. It is risky if you take regular medication or have a family. And if you are counting on Marketplace coverage instead, do not let that 60-day Special Enrollment window pass while you wait.
COBRA vs Marketplace: how to compare the real cost
Do the math with your own numbers, not averages. Use this table as a worksheet.
| Line | COBRA | Marketplace |
|---|---|---|
| Monthly premium | From your election notice (up to 102% of the full plan cost) | Plan price minus the premium tax credit HealthCare.gov estimates |
| Deductible already met this year | Kept | Starts over at zero |
| Doctors and prescriptions | Same network and formulary | Check every doctor and drug in the new plan |
| How long it lasts | Up to 18 months | Plan year; renew at open enrollment |
| What happens when you get a new job | Drop it when the new plan starts | Drop it when the new plan starts; repay excess credits at tax time if your income ends up higher than you estimated |
What the averages suggest. At the 2026 average premiums, a single employee who paid $1,672 a year (about $139 a month) toward coverage would face roughly $833 a month on COBRA. A family that paid $7,471 a year (about $623 a month) would face roughly $2,406 a month (KFF EHBS 2026, plus the 2% COBRA fee). For comparison, KFF puts the 2027 national average benchmark silver Marketplace premium for a 40-year-old at $703 a month before any tax credit (KFF). Your plan, age, ZIP code and income will move these numbers a lot.
Income: the part most people get wrong
Marketplace tax credits are based on your estimated household income for the whole calendar year, including what you earned before the layoff (HealthCare.gov). Unemployment benefits count as income too (HealthCare.gov income guide). For 2027 coverage, tax credits generally go to households earning between 100% and 400% of the 2026 poverty guidelines (KFF).
| Household size | 100% of poverty level | 400% (top of the tax-credit range) |
|---|---|---|
| 1 | $15,960 | $63,840 |
| 2 | $21,640 | $86,560 |
| 4 | $33,000 | $132,000 |
Source: HHS 2026 poverty guidelines, Federal Register, Jan 15, 2026 (48 states and DC; the 400% column is our multiplication).
Here is the trap for higher earners. Starting with the 2026 tax year, the caps that used to limit how much excess tax credit you repay are gone (KFF). Say you estimate a low 2027 income because you are out of work, collect tax credits, then land a well-paid job in spring. Your actual annual income could go above 400% of the poverty level, and you could owe back the credits you received. When you get an offer, update your Marketplace income estimate right away.
When COBRA usually wins
- You have met most of your deductible or out-of-pocket maximum, and the plan year has months left.
- You or a family member are in active treatment, pregnant, or depend on a specialist or drug that Marketplace plans near you do not cover.
- Your severance agreement pays some or all of your COBRA premiums. The DOL notes some employers do this as part of severance (DOL COBRA FAQ).
- Your expected income is above 400% of the poverty level, so a Marketplace plan would be full price anyway, and your COBRA plan is better coverage for similar money.
When a Marketplace plan usually wins
- Your expected annual income falls in the tax-credit range, especially if you were laid off early in the year.
- You are healthy, use little care, and a lower premium matters more than keeping a network.
- Your state adds its own subsidy. CNBC reported on Nov 9, 2026 that at least 11 states, including California, New Jersey, Maryland and Washington, offer state-funded premium help for 2027 (CNBC).