Health Insurance

COBRA

COBRA continuation coverage preserves your existing group health plan after a qualifying event but requires you to pay the full premium — both employee and employer shares — plus an administrative fee.

Last reviewed: May 2026 · Editorial methodology

Definition

The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires most employers with 20 or more employees to offer departing workers the option to continue their group health insurance for up to 18 months (36 months in some circumstances). Qualifying events include job loss for reasons other than gross misconduct, reduced work hours that cause loss of coverage, divorce from a covered employee, and a dependent child aging off the plan. The major drawback of COBRA is cost: the employee pays 100% of the group premium — both their share and the employer's share — plus a 2% administrative fee. For 2026, average employer-sponsored family premiums exceed $25,000 annually, meaning COBRA continuation can cost over $2,000 per month. Enrollment must be elected within 60 days of the qualifying event or notice of COBRA rights, whichever is later. COBRA is often compared unfavorably to ACA marketplace plans, which may offer premium tax credits that make marketplace coverage significantly cheaper during a qualifying special enrollment period triggered by job loss.

Where this term matters

Health Insurance →/life-events →

Tip

Glossary definitions are educational. Always check your own policy language — insurers can define common terms differently from one another. When in doubt, request a written explanation from your agent.

Related terms

Qualifying Life Event (QLE)Qualifying life events — like losing coverage, getting married, or having a baby — trigger a limited window to enroll in or change health insurance plans.Special Enrollment Period (SEP)An SEP gives you typically 60 days after a qualifying life event to get health coverage without waiting for open enrollment.Health Insurance MarketplaceThe marketplace, also called the exchange, is where most people shop for ACA plans and access premium tax credits to reduce their monthly premium.Premium Tax CreditThe premium tax credit (PTC) makes marketplace coverage affordable by offsetting a portion of your monthly premium based on your income and the cost of the benchmark Silver plan.

Related guides

Source: Cover Forge USA editorial team|Last verified: May 2026|Methodology
Definitions are educational and may be simplified. Always refer to your policy contract and consult a licensed agent for terms that affect coverage decisions.
CF

Cover Forge USA Editorial Team

Editorial Lead

This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.

Reviewed June 2026

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