COBRA after a layoff: how long, how much and the deadlines

Concerns & risks

You were laid off, coverage ends at month's end, and a COBRA notice is on its way.

Causes & evidence

The Department of Labor explains that COBRA generally applies to group health plans of private-sector employers with 20 or more employees, as well as state and local governments. After a job loss or reduction in hours, you and covered family members can generally continue coverage for up to 18 months; other events, like divorce or a dependent aging out, can allow up to 36 months for family members. You have at least 60 days to elect COBRA, counted from the later of the date coverage would end or the date the election notice is provided. Once you elect, you have 45 days to make the first premium payment. The plan can charge up to 102% of the cost of coverage, meaning the full premium including the part your employer used to pay plus a 2% administrative fee. Losing job-based coverage also opens a special enrollment period for Marketplace coverage, usually 60 days, where you may qualify for savings based on income.

Edge cases: small employers under 20 employees may be covered by state 'mini-COBRA' laws. A disability determination can extend coverage to 29 months. If the employer goes out of business and ends the plan, COBRA may not be available.

Missing the first payment deadline, even after electing COBRA, can end your coverage, so the 45-day date matters as much as the 60-day one.

What to do

1. Watch for the COBRA election notice and note the 60-day election deadline.
2. Get the monthly premium amount from the notice.
3. Compare it with Marketplace plans at HealthCare.gov during your 60-day special enrollment window.
4. Check whether a spouse's employer plan is an option.
5. If choosing COBRA, elect in writing and pay within 45 days.
6. Set reminders for each monthly payment and its grace period.

Common mistakes:

• Missing the first payment
• Not comparing Marketplace savings
• Dropping a family member who could stay on
• Waiting past the special enrollment window

ReportSpeedMan tip: Write the election and first-payment dates on your calendar the day the notice arrives. Most COBRA problems are missed dates, not missing coverage.

What I would actually do

I'd compare the COBRA premium with Marketplace plans during the special enrollment window, considering deductibles already met.

The trade-off people miss: COBRA keeps your doctors and deductible progress, but a Marketplace plan with income-based savings can cost much less.

Checking that it worked

You've chosen coverage before the 60-day deadline.

Quick FAQ

How long does COBRA last?
Usually 18 months after job loss.

What does it cost?
Up to 102% of the plan cost.

Can I choose Marketplace instead?
Yes, within the special enrollment window.

Wrap-up: COBRA usually lasts 18 months, costs up to 102% of the premium, and gives you 60 days to elect and 45 days to pay. Compare Marketplace plans before choosing.

Wiki: Emergency Fund and Wage and Hour Basics (FLSA).

COBRA after a layoff: official sources I checked

• DOL: Continuation of health coverage (COBRA)
• DOL: COBRA FAQs for workers