COBRA Health Insurance After a Layoff: What It Costs & Alternatives

When you lose your job, you also lose your employer-sponsored health insurance — and the bill to keep it can be a shock.

COBRA lets you continue your employer's health plan for up to 18 months after a layoff. The catch: you pay the full premium yourself, plus a 2% administrative fee. For a family plan that once cost your employer $2,000 a month, that's your new reality.

The median COBRA premium for family coverage is over $24,000 a year — a massive fixed cost at the exact moment your income just dropped to a fraction of what it was.

Your alternatives, ranked by cost

1. A spouse or partner's plan — almost always the cheapest option if it's available.

2. A Health Insurance Marketplace plan — you qualify for a special enrollment period after job loss, and subsidies can dramatically cut the cost.

3. COBRA — worth it only if you have an ongoing treatment, or a provider you must keep, and no cheaper path exists.

Why this matters for your layoff planning

Health coverage is a fixed cost that keeps arriving whether you have income or not. A Cushion policy is designed to cover exactly these obligations — mortgage, childcare, student loans, and yes, health insurance — so a job gap doesn't force you to choose between your health and your savings.

Before you need COBRA, you should know what it costs and what your alternatives are. That's the difference between a planned transition and a financial emergency.