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Health insurance after a layoff

What Are the Alternatives to COBRA Insurance? Your Options After a Layoff, in Any State

Written and reviewed by Dick Tracy, licensed health insurance broker (NPN 20414610) · Published September 2, 2026

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Quick answer COBRA is your old employer plan with the employer's share of the bill moved onto you: 102% of the full premium, which at KFF's 2025 national averages is about $793 a month for one person and about $2,294 a month for a family. The alternatives are the other four buckets of health coverage. A marketplace plan through the 60-day special enrollment period that a job loss opens, with a premium tax credit if your income for the year lands under the 2026 subsidy cliff. A pre-established group plan you merge into as an individual at group rates. In states with private underwriting, a plan priced on your own health or a defined benefit plan. And a short-term bridge in the states that allow one. You have 60 days to elect COBRA and it is retroactive, so the right first move is to shop, not to sign. Which alternatives exist depends on your state, and I lay that out below.

I'm Dick Tracy, a health insurance broker in Buffalo, New York, licensed in 25 states with 80+ carriers behind me. I came out of the healthcare side of this business, so there is no gag clause on me. When a plant closes or a company cuts a department, everybody in the building gets the same COBRA packet, and most people either sign it in a panic or throw it in a drawer. Both moves cost money. This page is the map I wish came in the envelope: the tips, the tricks, and the traps, for any state.

COBRA in six facts

Before the alternatives, the thing itself, straight from the federal rules. One: COBRA applies to employer plans at companies with 20 or more employees; smaller employers fall under state continuation laws that vary. Two: you pay the full premium plus up to a 2% administration fee, so 102% of what the employer was paying in total. Three: you get 60 days from the later of your coverage-loss date or the date of your election notice to decide. Four: after you elect, you get 45 days to make the first payment. Five: coverage is retroactive to the day your job coverage ended, so nothing in the window goes uncovered if you elect. Six: it lasts up to 18 months federally, and some states extend it, New York to 36 months.

Sources: U.S. Department of Labor, An Employee's Guide to Health Benefits Under COBRA. New York 36-month continuation: NYS Department of Financial Services.

The 60-day window is a shopping window, not a deadline to fear

Here is the play almost nobody explains in the exit meeting. Losing job-based coverage opens two clocks at once: 60 days to elect COBRA, and a 60-day special enrollment period on the marketplace. COBRA is retroactive. So you can spend those weeks getting real prices on every bucket, and if nothing happens medically you let the COBRA window close and enroll where the price is better. If you land in an emergency room in week three, you elect COBRA and it reaches backward to cover the visit. The window buys you time to shop, and most people burn it in a drawer. One trap on the back end: cancelling COBRA voluntarily partway through does not open a new special enrollment period, so price everything before you elect, not after. The full head-to-head is on the COBRA vs marketplace page.

The five buckets you can choose from in that window

Every private health coverage option for people under 65 falls into one of five buckets, and COBRA is just a way of staying in the one you were in. I explain all five in depth, with the pros and cons of each, on the five types of health insurance page. Here is the short version as it applies to someone holding an election notice.

Bucket one, the marketplace. Guaranteed issue, no health questions, and the only bucket with a subsidy. If your income for the year drops because of the layoff, a premium tax credit can make this the cheapest door by a wide margin. If your household is over the 2026 subsidy cliff at 400% of the federal poverty level, you pay sticker, and sticker is not far from COBRA. Check the free cliff calculator first. If you have had a serious diagnosis recently, this bucket or COBRA is the honest answer.

Bucket two, group plans, including the group merge. A job ending does not have to mean leaving the group bucket. There are pre-established group plans an individual can merge into at group rates without being anyone's employee, through federal ERISA law. Group rates, a true PPO network, and a policy you own no matter where you work next. It is underwritten, so it suits healthy people and families, and it is the door I open first for healthy New Yorkers over the cliff. Details: pre-established ERISA group plans.

Bucket three, short-term medical. A temporary plan for a fixed term, often lower cost for people who pass underwriting. Not allowed in New York, New Jersey, or California. I rarely reach for it, because the COBRA window itself is usually a better bridge, but in the states that allow it, it exists.

Bucket four, healthcare sharing ministries. Not insurance. Members share bills, no claim is guaranteed, and no state department of insurance stands behind it. The monthly number looks good after a layoff, which is exactly when people get hurt by it. I am appointed with some and almost never write one.

Bucket five, defined benefit, also called fixed indemnity. In states with private underwriting, a plan that pays set dollar amounts per service, first dollar, in or out of network, with stable premiums and guaranteed renewability. A foundation, not a whole house, and not written for New York residents.

Which alternatives exist in your state

The national COBRA articles skip this, and it decides everything. The rules on private underwriting are set state by state.

I am licensed in 25 states: AL, AZ, CA, CO, CT, DE, FL, GA, IN, KY, ME, MD, MA, MI, NJ, NY, NC, OH, PA, SC, TN, TX, VA, WV, WI. Availability reflects each state's individual-market rules and the plans I write.

When COBRA is still the right answer

I tell people to take COBRA in four situations, and I mean it even though it is the pricier door. You are mid-treatment and switching would interrupt care or a prior authorization. You have already met most of your deductible or out-of-pocket maximum this plan year, because a new plan starts you at zero. You are pregnant and your OB and hospital are on the current plan. Or you have had a serious diagnosis recently and want to keep the network and formulary you already know works. Read your severance agreement too: some employers pay part of the COBRA premium for a few months, and if yours does, the number on the notice is not the number you pay.

Layoff moves most people miss

Your spouse's plan. Losing coverage is a qualifying event for your spouse's employer plan too, and that window is usually only 30 days, not 60. If the spouse's plan is good, it is often the cheapest door on the board and the one people forget.

Your kids. A drop in income can qualify children for your state's children's health program even when the parents buy their own coverage. In New York that is Child Health Plus. Splitting the family across two buckets is often cheaper than one family plan.

Your income estimate. The subsidy is based on what you expect to earn for the whole year, not what you earned last year. A layoff in September changes that number. Estimate honestly, because 2026 has no cap on repaying an advance credit you were not entitled to. The premium tax credit knockouts page covers who cannot claim it at all.

The election notice. Keep it. The date on it starts your 60 days, and the premium on it is the number every alternative has to beat.

Common questions about COBRA alternatives