Health insurance from your job usually expires at the end of the month you leave, though some employer plans end on your last day of work instead. The only way to know your exact date is to check your benefits paperwork or ask HR before you walk out. Federal law then gives you at least 60 days to either continue that same plan through COBRA or enroll in a new plan through the Health Insurance Marketplace.
Your Last Day of Coverage Depends on the Plan Contract
No federal law forces employers to keep your health insurance active for any set period after you leave. The termination date is written into your employer’s group health contract with the insurer. Most contracts run coverage through the end of the month in which your last day falls, so if you leave on March 10, you’d typically stay covered through March 31. Some employers cut coverage off on your actual final workday.
This distinction matters. An extra few weeks of coverage lets you fill prescriptions, finish appointments, and line up your next plan without pressure. A same-day cutoff means the clock starts immediately. Ask HR for your specific termination date in writing before you leave.
Severance agreements sometimes include continued health coverage, with the employer paying premiums for a set number of months. If you’re negotiating severance, this is one of the more valuable pieces to ask for. Note that employer-paid coverage after separation still counts toward your COBRA eligibility window; the 18-month COBRA clock runs from the qualifying event itself, not from when you start paying out of pocket.
The 60-Day Window That Follows
Once your employer coverage ends, two separate 60-day deadlines open up, and both matter.
The first is your COBRA election period. After you leave, the plan administrator will send an election notice explaining your rights, costs, and deadlines. You have at least 60 days from the later of the notice date or your coverage end date to decide whether to enroll.1Centers for Medicare & Medicaid Services. COBRA Continuation Coverage Questions and Answers If you never receive the notice, contact your former employer’s HR or benefits administrator directly.
The second is your Special Enrollment Period on the Health Insurance Marketplace. Losing job-based coverage qualifies you to enroll outside the annual Open Enrollment window, and you have 60 days from the date you lose coverage to pick a plan.2HealthCare.gov. See Your Options If You Lose Job-Based Health Insurance This applies whether you quit, were laid off, or were fired.
Miss both deadlines and you’re generally locked out until the next Open Enrollment Period or the next qualifying life event, which could leave you uninsured for months.
COBRA Keeps Your Exact Plan, at Full Price
COBRA lets you keep your employer’s health plan after you leave, at your own expense. It applies to private-sector employers and state or local governments with 20 or more employees.3U.S. Department of Labor. FAQs on COBRA Continuation Health Coverage for Workers The coverage must be identical to what similarly situated active employees get, so your doctors, prescriptions, and benefits stay the same.1Centers for Medicare & Medicaid Services. COBRA Continuation Coverage Questions and Answers When you leave voluntarily or involuntarily, COBRA lasts up to 18 months.
A useful detail most people miss: COBRA is retroactive. If you elect it within the 60-day window, coverage reaches back to the day your employer plan ended, with no gap.4U.S. Department of Labor. COBRA Continuation Coverage You’ll owe premiums for the retroactive period, but any medical bills from the gap are covered. That turns the 60-day window into a safety net: you can wait to elect COBRA and only trigger it if you actually need medical care during those 60 days.
Payment deadlines are more forgiving than the notification process suggests. You don’t owe anything at the moment you elect. The plan must give you at least 45 days after election to make the first premium payment, and each subsequent payment carries a 30-day grace period past the due date.5U.S. Department of Labor. An Employees Guide to Health Benefits Under COBRA Miss a payment deadline, though, and the plan can terminate your coverage permanently.
What COBRA Actually Costs
COBRA sticker shock is real. While you were employed, your company likely paid 70% to 80% of your premium. Under COBRA you pay the entire amount, both your share and what the employer used to cover, plus a 2% administrative fee.3U.S. Department of Labor. FAQs on COBRA Continuation Health Coverage for Workers No subsidies or tax credits apply.
In 2025, the average annual premium for employer-sponsored health insurance was $9,325 for individual coverage and $26,993 for family coverage.6KFF. 2025 Employer Health Benefits Survey Summary of Findings With the 2% administrative surcharge, that translates to roughly $793 per month for an individual and about $2,294 per month for a family. Your actual cost depends on your specific plan, but those averages give you a realistic baseline.
The Marketplace Is Usually the Cheaper Path
For most people leaving a job, a Marketplace plan is the better financial deal. Premium tax credits can dramatically reduce your monthly cost based on household income. And you can qualify for those subsidies even if you’re eligible for COBRA, as long as you haven’t actually enrolled in it. If you already elected COBRA, you can still switch to a subsidized Marketplace plan by terminating COBRA before the Marketplace plan starts.7Centers for Medicare & Medicaid Services. COBRA Coverage and the Marketplace
For 2026, premium tax credits are available to households earning between 100% and 400% of the Federal Poverty Level. For a single person, that’s up to $62,600. For a family of four, the cap is $128,600. Earning even one dollar above disqualifies you entirely. This cliff returned in 2026 after temporary rules that had smoothed it out expired at the end of 2025, so if your income is near the cutoff, managing your taxable income for the year matters.
For the 2026 plan year, Open Enrollment on the federal Marketplace runs from November 1, 2025 through January 15, 2026.8Centers for Medicare & Medicaid Services. Marketplace 2026 Open Enrollment Fact Sheet State-run exchanges may have slightly different deadlines. Outside your job-loss Special Enrollment Period, that Open Enrollment window is your next chance.
When COBRA Makes More Sense Than the Marketplace
COBRA tends to win when you’re mid-treatment with a specialist who isn’t in any Marketplace plan’s network, you’ve already met your deductible for the year and switching would reset it, or your income is high enough that Marketplace subsidies don’t meaningfully help. The Marketplace usually wins when your income qualifies you for premium tax credits, you don’t need to keep a specific provider network, or you need coverage for longer than 18 months.
A smart hybrid: treat the 60-day COBRA window as a safety net while you shop the Marketplace. Enroll in a Marketplace plan if you find one that works, and skip COBRA entirely. If something urgent happens medically before your Marketplace plan starts, elect COBRA retroactively to cover those bills.
Medicaid and CHIP If Your Income Drops
If losing your job significantly reduces household income, you may qualify for Medicaid, which provides free or very low-cost coverage. In the 41 states (including Washington, D.C.) that expanded Medicaid, adults with incomes up to 138% of the Federal Poverty Level qualify.9KFF. Status of State Medicaid Expansion Decisions For a single adult in 2026, that’s roughly $21,600 per year. The 10 states that haven’t expanded have stricter rules.
Children have broader protections. The Children’s Health Insurance Program (CHIP) covers medical and dental care for uninsured children and teens up to age 19, with income limits higher than Medicaid in most states.10USAGov. How to Apply for Medicaid and CHIP Medicaid and CHIP accept applications year-round, with no enrollment windows.
If Your Employer Was Too Small for COBRA
COBRA only applies to employers with 20 or more employees. If your employer was smaller, federal COBRA doesn’t cover you. Many states fill this gap with their own continuation laws, commonly called “mini-COBRA.” Coverage periods vary from about two months to 36 months depending on the state, and not every state has one. Check with your state insurance department or your former employer’s insurance carrier.
COBRA also disappears if your former employer goes out of business entirely and stops maintaining any group health plan. If there’s no plan left, there’s nothing to continue. In that case, the Marketplace Special Enrollment Period, Medicaid if you qualify, or short-term coverage are your remaining options.
Your HSA and FSA Follow Different Rules
Health Savings Accounts and Flexible Spending Accounts behave very differently at separation, and confusing the two can cost you money.
Your HSA belongs to you. The balance stays in your account after you leave, and you can keep spending it on qualified medical expenses indefinitely. What changes is your ability to add new contributions, which requires enrollment in a qualifying high-deductible health plan.11Office of the Law Revision Counsel. 26 U.S. Code 223 – Health Savings Accounts For 2026, an HDHP must carry a minimum deductible of $1,700 for individual coverage or $3,400 for family coverage, and the HSA contribution limits are $4,400 for self-only coverage and $8,750 for family coverage.12IRS. Revenue Procedure 2025-19
FSAs are a different story. Your FSA balance typically expires on your last day of work, and any unspent money is forfeited. Some employers offer a short run-out period to submit claims for expenses that happened before your termination date, but you generally can’t incur new expenses after separation and get reimbursed. If you know you’re leaving, spend down your FSA on eligible expenses beforehand.
Closing the Gap Between Plans
The biggest risk during a job transition is an uninsured window between your old plan ending and your new coverage starting. Marketplace plans selected by the 15th of the month generally start the first of the following month. If your employer coverage ends March 31 and you enroll in a Marketplace plan by April 15, your new coverage starts May 1, leaving all of April exposed.
COBRA’s retroactive coverage is the cleanest way to close that gap. Because it reaches back to your last day of employer coverage, electing COBRA within the 60-day window ensures continuous coverage even if you plan to switch to a Marketplace plan. You’d pay COBRA premiums only for the gap period, then let it lapse once the Marketplace plan takes over. That costs more than going uninsured for a few weeks, but a single emergency room visit without insurance can dwarf several months of premiums.