COBRA Insurance: Extend the Group Plan When You Are Between Jobs

September 27, 2023

Employer’s Benefits: Extend Your Health Insurance

Losing or leaving a job can be stressful, especially as the pandemic continues to affect unemployment rates in the United States.

In April 2020, COVID-induced layoffs continued across the country, causing over 6 million citizens to look for coverage during the unemployment period. Career decisions often depend on the benefits employers provide. That is why those who get fired, laid off, or decide to quit have to cover a lot of ground when it comes to leaving a company or creating retirement plans.

Any type of job termination implies that your job-based coverage will eventually end. And while there is no specific timeframe for that, you are likely to get a few extra months of health protection. But what happens after that?

As a former employee, you need to understand your options and rights. With that in mind, we have put together a short review of what happens after you are no longer employed and how to secure temporary coverage.

What You Need To Know About Extending Your Health Plan

Employers typically offer multiple perks and benefits to their workers, like paid vacation, advanced training, and health insurance. The latter is likely the biggest perk for any employee since it helps to reduce medical bills.

Lately, it was almost impossible for many Americans to access the coverage options meant to replace employer-based ones.

The Bureau of Labor Statistics revealed that the average insurance-related spend was $3,405 in 2018. So, it stands to reason that middle-income families likely struggled to cover the costs. But after the American Rescue Plan package was introduced in March 2021, coverage alternatives became more affordable.

And while it might still be stressful to become unemployed and lose your coverage, you can extend the plan or go with an alternative option. This way, you will get much-needed health protection until your unemployment days are over.

So let’s get into details on what losing your benefits means, how it works, and how former employees can protect their health afterward.

Are There Any Established Deadlines for Losing the Job-based Insurance?

There is no minimum period established for employer-sponsored coverage, which means there is no way to tell how long your coverage will last, and the company can only set it. But, simultaneously, you can extend it from 18 to 36 months if you decide to apply for COBRA coverage.

Did you miss our recent article on getting COBRA insurance after leaving a job? Check it out here to see how to navigate through the unemployment period.

How COBRA Works

This program allows ex-workers and their families who lose coverage due to job termination to extend the group plan initially provided by the employer. But when considering this option, many employees start questioning the most appropriate approach. 

Check this short guide if you struggle to choose between COBRA and marketplace plans.

COBRA Insurance Extend the Group Plan When You Are Between Jobs - infographics

Source: MyChoice Market

You can enroll in this program to ensure the same level of your family’s medical and financial health regardless of the voluntary or involuntary loss of employment. But remember that employers typically cover a large portion of your insurance-related payments. Simply put, you will have to pay considerably more once the job-based group benefits end.

How Much Does This Program Cost?

The COBRA program will require you to cover all the insurance costs and a 2% administrative fee. In other words, your employer will no longer take part in the process, and the company will only grant you access to its insurance benefits for a limited period.

The cost of this program generally depends on the coverage that your former employer initially provided. As a reference, the average annual cost of job-based insurance covering you and your family is around $22,000. And since employers typically cover more than half of your premiums, you should be ready to face the increased spending.

Yes, COBRA is an expensive option. But there is a way to deal with the costs — a Health Coverage Tax Credit (HCTC) offered by the U.S. Department of Labor. It can be used to cover 72.5% of COBRA premiums. But there is a catch — you have to prove that you are eligible.

The eligibility implies that you have to lose your job due to the negative impact of global trade. In this case, you can receive the perks offered by the Trade Adjustment program. For more information, please visit this website.

How to Apply

The process is relatively simple. If you are laid off, fired, or quitting for any reason except for misconduct, your employer must notify you two weeks before the actual termination occurs. Afterward, you will have 60 days to choose suitable coverage. In other words, you can sign up for COBRA or waive it and go with an alternative option.

If you decide to waive this option, you can change your mind, revoke the waiver, and enroll in the program. The only requirement is to do it within the set time limit.

COBRA Alternatives

Naturally, this program is one of many options. You might also qualify for other health benefits. Here are some of them:

  • Use the job-based insurance of your spouse or partner. Quitting a job activates a special enrollment period allowing you to join your partner’s health plan.
  • Find a suitable plan through the marketplace. A qualifying event allows you not to sit around waiting for the next Open Enrollment. This way, you will have 60 days to pick a plan that satisfies your needs. But remember that it activates a month after losing your coverage.
  • Find out if you’re eligible to enroll in the Children’s Health Insurance Program. It is a common choice for low-income and moderate-income families that do not qualify for Medicaid. You can find more information on the program here.


Frequently Asked Questions


Unfortunately, it won’t. These plans typically activate a month after your employer-based coverage ends. For example, if you lose your coverage on April 8 and select a plan through the marketplace by the end of April, it will start on May 1.


In some cases, you may be asked to provide proof. But no need to worry because your eligibility notice will provide detailed information on the verification process.


It depends on your needs and eligibility. This program is expensive, and you might find better alternatives. If you land a new job in a short time, you can use COBRA to bridge the small gap between the jobs.


Yes, you most definitely can. Besides, you can also be eligible if you lose the coverage due to the divorce, your partner’s death, and even if you get fired. The only exception is misconduct; if that was the reason behind the job termination, your eligibility is out of the question.

Victoria Berezhetska

Victoria Berezhetska is a Content Lead at and an expert contributor to CoverExplore. She has a Bachelor of Science degree in Business Administration, with extensive working experience as a PR specialist and content writer. At CoverExplore, she helps customers find the right educational material through easily digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers diverse topics around digital and insurance marketing, including auto, home, health, and life insurance.

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