COBRA insurance
Temporary health coverage continuation after leaving a job, at your own expense.
Full definition
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to continue your employer-sponsored health insurance for up to 18–36 months after leaving a job, losing hours, or experiencing other qualifying events. The catch: you pay the full premium — both your share and what your employer was paying — plus a 2% admin fee. COBRA is often 3–4x what you paid while employed.
Real-world example
While employed, you paid $180/month for health insurance. Your employer paid $620/month. On COBRA, you pay $180 + $620 + 2% = $816/month for identical coverage.
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Temporary health coverage continuation after leaving a job, at your own expense.
Related terms
- Health insurance deductible
The amount you pay for health care each year before insurance starts paying.
- ACA subsidy
Government financial help to reduce your health insurance premium on the marketplace.