A layoff ends your employer health coverage, but not immediately. You have a limited window to choose new coverage. Here’s what you’re working with — your options and your deadline. Both have changed for 2026, in ways that make the usual COBRA-versus-marketplace math less reliable than it used to be.
Your Health Insurance Options After a Layoff, at a Glance
The Four Paths Most People Have
When employer-sponsored coverage ends, four paths open up:
- COBRA — continuing your exact same employer plan, at your own expense
- An ACA marketplace plan — a new plan bought through the public exchange, often with a subsidy
- A spouse’s employer plan — joining your spouse’s coverage if that option exists
- Short-term or individual coverage — a bridge option for gaps that don’t fit neatly into the first three
You can see how these break down between on-exchange and off-exchange coverage in my full breakdown of available options.
Why the Right One Isn’t the Same for Everyone
The right path depends on factors specific to you.
- Income relative to certain subsidy thresholds
- A spouse’s plan enrollment window, if one exists
- Expected medical care over the next several months
- A deductible reset to zero, even if you already met this year’s amount
That reset can add real out-of-pocket cost on top of the new premium. COBRA and marketplace coverage often get compared as if they’re interchangeable. For someone near a certain income level, though, the cost difference between the two can be significant. Calculate your own numbers before assuming the default option is the right one.
How Long Do You Have to Sign Up for New Coverage?
How the 60-Day Special Enrollment Period Works
Losing job-based coverage counts as a qualifying life event, and it opens what’s called a Special Enrollment Period. You get 60 days from the date your coverage ends to enroll in a new marketplace plan. Coverage can start as early as the first day of the following month, depending on timing. HealthCare.gov lays out that window and the application steps in detail. My FAQ section answers the most common timing questions I get about this window.
What Happens If You Miss the Window
Miss the 60-day marketplace window, and you’re typically stuck waiting for the next Open Enrollment Period. An exception exists if another qualifying event occurs in the meantime, such as marriage, a move, or a new dependent. Missing the window doesn’t require choosing a permanent plan immediately. It can still leave you without coverage, and without options, for months.
How COBRA Works After a Layoff
Keeping Your Exact Plan, at Your Own Expense
COBRA lets you keep the exact plan you had through your employer, same doctors, same network, same coverage. Your employer just stops covering part of the bill. The U.S. Department of Labor confirms your former employer’s plan can charge up to 102% of the group plan’s cost. That figure covers the share your employer used to pay, plus a small administrative fee. Your plan administrator has 44 days from your layoff to send you the formal election notice. Your timeline for deciding begins once you receive it.
When COBRA Makes Sense
COBRA tends to make sense when continuity matters more than cost. It can make sense if you’re mid-treatment for a condition, or want to keep a specific specialist. It can also make sense if you’ve already met your deductible for the year. It’s rarely the cheapest option on paper. But the stability of an unchanged plan can be worth the higher premium. That’s true if switching providers or restarting a deductible isn’t worth the savings.
Why the Marketplace Math Changed for 2026
The Subsidy Cliff Is Back
For years, temporary, expanded ACA subsidies capped what anyone paid for a marketplace plan. Nobody paid more than a set share of their income, regardless of earnings. That expanded subsidy structure expired heading into 2026, and the 400% threshold now functions as a hard cutoff. Cross it, and no subsidy applies, regardless of how close your income sits to that line. According to KFF, the 400% federal poverty line cutoff has returned. Subsidized enrollees now face an average payment increase of 114%. Benchmark premiums are also climbing by roughly 18% nationally this year. If your income sits above that 400% threshold, you’ll likely pay the full, unsubsidized price for a marketplace plan.
Who Still Comes Out Ahead on the Marketplace
Not everyone loses ground here. If your income is well below that 400% threshold, you likely still qualify for meaningful subsidies. Marketplace coverage can still land well below COBRA’s full premium. Subsidies shrink gradually as income rises toward that 400% line. The closer you sit to it, the smaller the subsidy becomes, even before you cross it entirely. The people most affected by this shift are those with income near that line. A marketplace plan there used to cost far less than COBRA. It may now cost close to the same amount. Compare both options using this year’s numbers, not last year’s.
When COBRA and the Marketplace Aren’t Your Only Paths
Getting Added to a Spouse’s Plan
If your spouse has employer coverage, a layoff usually qualifies you for a special enrollment window onto their plan too. That window generally runs around 30 days from your coverage loss. Confirm eligibility directly with their employer’s benefits department. Premium costs, network, and coverage will vary by employer, so compare the details before assuming it’s the better option.
Short-Term Coverage as a Bridge, Not a Destination
Short-term or limited-duration plans provide temporary coverage while you arrange longer-term insurance. The federal rules governing how long these plans can last are currently in flux. Confirm the current duration limit before enrolling, rather than relying on outdated information. These plans can also deny coverage based on a pre-existing condition. That sets them apart from ACA marketplace plans, which cannot use your health history to determine eligibility or price. Their purpose stays the same regardless. It’s a bridge, not a permanent plan. These policies typically limit what they cover. Review the coverage details before using one for more than a short gap.
Comparing Your Options Before You Decide
You don’t need to carry the weight of this decision entirely on your own. I’ve spent 25 years helping people work through exactly this kind of decision, licensed in 33 states. The right choice depends on numbers specific to you. That means your income, health needs, a spouse’s plan, and how close you sit to that subsidy cliff. If you want to compare your specific situation with me, book a time to talk it through. We’ll run the actual numbers together, not just the general rules.
