Straight talk about COBRA and COBRA alternatives

Choosing the right health insurance during a stressful time can be difficult. Whether the potential loss of coverage comes because of a layoff, medical issue, divorce or other issue, this decision can be crucial to your health and financial well-being.

COBRA provides the best coverage but at a high price. Savings may be achieved through a COBRA alternative insurance but only under specific circumstances.

This Web page highlights the information you need to know to get started in making the best decision. The listing is shown in brief bullet format to provide a fast and easy understanding of the key issues. For more detailed information please see the Questions and Answers section.

COBRA coverage may be the best choice when:

  • your employer (or former employer) has 20 or more employees
  • termination of your group health insurance is due to a layoff or divorce
  • your income is too high to qualify for a health insurance subsidy
  • you or a family member have ongoing medical issues
  • any family member is pregnant

Specific information about COBRA, including eligibility, pricing, coverage and enrollment, is available "offline" directly from the employer's health plan administrator.

COBRA alternative coverage may be best choice when:

  • the employer (or former employer) sponsoring the health pan has fewer than 20 employees
  • group health insurance is not provided by the employer
  • your household income qualifies you for a health insurance subsidy
  • the employer elects to terminate group health insurance for all employees
  • the cause of work termination is classified as "gross misconduct"
  • the employer terminates a health plan
  • the employer goes bankrupt
  • COBRA benefits are exhausted (usually after 18 months or 36 months in New York)
  • COBRA benefits are unaffordable
  • your income is either at the low range or the upper levels. In either case, these individuals tend to prefer insurance other than COBRA. 
  • you are moving to a new residence where the employer health plan does not operate
  • you become eligible for Medicare
  • your past income makes state-sponsored welfare-type health insurance available


Key differences* in types of gap insurance:

  • COBRA insurance covers pre-existing medical conditions, COBRA alternatives do not.
  • COBRA coverage is expensive, COBRA alternatives are not.
  • COBRA coverage is held by strict regulation, COBRA alternatives are widely varied
  • COBRA is handled "offline", COBRA alternatives are handled "online".

* This chart is intentionally over-simplified to provide a general understanding and starting point for research. Details and clarifications are provided elsewhere on this site and from the other references listed.

Information about COBRA alternatives, including available plans, prices, eligibility and enrollment, is available through Freedom Benefits short term medical insurance quote service. provides help with COBRA issues

COBRA continuation coverage may provide temporary protection when changing jobs, going through a divorce or negotiating other life transitions. Choosing the right health insurance is crucial to protect your health and financial security.