How it works
A COBRA-versus-marketplace calculation prices the bridge every job changer walks: the months between paychecks when coverage must continue anyway. COBRA sells continuity — same doctors, same network, same accumulated deductible progress — at the full group rate plus a two percent administrative fee, because the employer's subsidy departs with the job. The marketplace sells a new policy whose sticker price collapses under premium tax credits once household income drops, though its deductible restarts at zero and its network may exclude the specialists currently managing your care. Total-cost honesty requires pricing both sides fully: premiums across every bridge month plus your realistic share of expected care, where deductibles bite hardest — a two-thousand-dollar procedure lands nearly in full under a six-thousand-five-hundred-dollar marketplace deductible but mostly absorbed under a fifteen-hundred-dollar COBRA one. The calculator runs the month-by-month race so short bridges reveal their truth quickly: one or two modest-care months often go to the subsidized marketplace by thousands, while longer bridges or heavy planned treatment let COBRA's continuity earn its premium. Timing rules shape strategy beyond the spreadsheet: job loss opens a special enrollment window immediately, subsidies trued-up at tax time claw back if income rebounds harder than reported, and COBRA's retroactive election trick — declining initially, electing within sixty days only if care appears — remains the most underused hedge in American benefits paperwork.
Formula
COBRA total = months x premium + min(care, deductible) | marketplace total = months x subsidized premium + min(care, deductible)
Tips
- You have 60 days to elect COBRA retroactively — decline initially, elect only if real care appears.
- Report bridge income accurately; subsidy overpayments get clawed back at tax filing.
- Check provider networks before choosing cheap — mid-treatment oncology does not transfer politely.
- Job loss triggers a special enrollment window; you never wait for open enrollment.
- Spouse employer coverage is option three: adding you mid-year qualifies as a life event there too.
Frequently asked questions
- How much does COBRA cost per month?
- Typically the entire employer-plan premium plus two percent — commonly seven hundred to over a thousand dollars monthly for family coverage — because you now pay both halves the employer previously subsidized. Your election notice states the exact figure; treat verbal HR estimates as placeholders until the letter arrives in writing.
- Is marketplace insurance cheaper than COBRA?
- Usually yes on premiums, since job-loss income triggers substantial premium tax credits that can cut silver plans to nominal amounts. But marketplace deductibles often exceed COBRA's, so heavy planned care during the bridge narrows or reverses the headline saving. Total-cost math including deductibles decides, not premium comparison alone.
- How long do I have to decide about COBRA?
- At least sixty days from the election notice or from losing coverage, whichever is later. Election is retroactive to the loss date: you can wait to see whether care appears, enroll only if it does, pay premiums back to day one, and be fully covered — a legitimate option play.
- Can I get marketplace subsidies while on severance?
- Severance complicates the estimate because lump-sum payments may raise your projected annual income substantially depending on timing and structure. Subsidies key off modified AGI for the whole year, so severance received early inflates the projection. Model conservatively — overestimated credits become repayment due at tax filing.
- What happens to my HSA when I leave my job?
- Nothing adverse — the balance, investments and archived receipts remain yours permanently, though contributions stop without HDHP coverage. Qualified-expense spending stays allowed indefinitely. This portability asymmetry is a quiet argument for funding HSAs aggressively during employed high-deductible years rather than treating them as spending accounts.