By Harry Prabandham · Updated September 28, 2026
Personal Finance
COBRA vs. ACA Marketplace: Health Coverage After Leaving a Job
COBRA keeps your old plan at up to 102% of its full cost; a Marketplace plan may cost less with premium tax credits. You have 60 days to decide.
COBRA vs. ACA Marketplace: Health Coverage After Leaving a Job
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How do COBRA and Marketplace coverage compare?
- COBRA continues your former employer's plan, usually for up to 18 months, at up to 102% of the plan's full cost.
- A Marketplace plan is new individual coverage, and income-based premium tax credits can lower its cost.
- Losing job-based coverage opens a 60-day Special Enrollment Period for the Marketplace.
- The fit depends on your doctors, progress toward this year's deductible, expected income, and how long you'll need coverage.
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How do COBRA and Marketplace coverage compare?
- COBRA continues your former employer's plan, usually for up to 18 months, at up to 102% of the plan's full cost.
- A Marketplace plan is new individual coverage, and income-based premium tax credits can lower its cost.
- Losing job-based coverage opens a 60-day Special Enrollment Period for the Marketplace.
- The fit depends on your doctors, progress toward this year's deductible, expected income, and how long you'll need coverage.
How does COBRA work?
- Federal COBRA applies to group health plans of employers with 20 or more employees; California's Cal-COBRA covers employers with 2 to 19.
- Coverage generally lasts up to 18 months after a job loss, and longer for events such as disability, divorce, or death.
- You have at least 60 days to elect, and coverage is retroactive to the date the plan ended once you elect and pay.
- Your network, benefits, and progress toward the deductible stay the same.
How does Marketplace coverage work?
- HealthCare.gov or a state exchange such as Covered California sells individual plans in Bronze, Silver, Gold, and Platinum tiers.
- Insurers can't deny coverage or charge more because of pre-existing conditions.
- Starting in 2026, Bronze and catastrophic plans can qualify as HSA-compatible.
- A new plan usually means a new deductible and possibly a different network and drug formulary.
What changed with premium tax credits in 2026?
- The enhanced premium tax credits in effect from 2021 through 2025 expired at the end of 2025.
- For 2026 coverage, eligibility generally ends when household income exceeds 400% of the federal poverty level.
- Credits are based on projected income and reconciled on your tax return, and from 2026 the cap on repaying excess advance credits no longer applies.
- Early retirees and people between jobs can see very different premiums depending on the year's income.
Can you switch from COBRA to a Marketplace plan later?
- You can switch during the annual Open Enrollment period for any reason.
- If COBRA runs out, or your former employer stops contributing to its cost, you get a new 60-day Special Enrollment Period.
- Voluntarily dropping COBRA or stopping premium payments mid-year doesn't qualify for a Special Enrollment Period.
- That rule makes the initial choice more consequential than it first looks.
When does each option tend to fit?
- COBRA can fit when you're mid-treatment, have met much of this year's deductible, or expect new employer coverage soon.
- A Marketplace plan can fit when your income qualifies for credits, your providers are in network, or you need coverage beyond 18 months.
- Compare total annual cost, including premiums, deductibles, copays, and out-of-pocket maximums, not premiums alone.
Key takeaways
- COBRA preserves your current plan at full cost plus up to 2%.
- Marketplace credits depend on income, and the enhanced credits expired after 2025.
- Dropping COBRA voluntarily mid-year doesn't open a Marketplace enrollment window.
- A licensed insurance agent or Covered California can price plans for your situation.
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