COBRA vs. ACA Marketplace: A Guide for Agents
A client loses job-based coverage and the clock starts: 60 days to compare COBRA against a Marketplace plan under this year's smaller subsidies, and what to document before the deadline closes.
COBRA or the ACA Marketplace: the short answer When a client loses job-based coverage, they usually have two options: pay full price to stay on the employer's plan through COBRA, or shop a new plan on the ACA Marketplace. For most clients, the Marketplace is worth pricing out first — especially this year, now that the larger pandemic-era subsidies are gone and the math has changed — but the right answer depends on income, the plan network, and how close they already are to meeting a deductible. Either way, the clock starts the day coverage ends: they have 60 days to enroll in a Marketplace plan, whether or not they also elect COBRA ( HealthCare.gov ). What each option actually means COBRA lets a client keep the exact plan, network and deductible accumulation they already had through their employer, usually for up to 18 months. The catch is cost: they typically pay the full premium themselves, including the share their employer used to cover, plus a small administrative fee ( HealthCare.gov ). A Marketplace plan is a new policy, usually on a different network, bought through HealthCare.gov or a state exchange. Losing job-based coverage qualifies a client for a Special Enrollment Period (SEP) , and the premium can be reduced by a premium tax credit based on household income for the year — not just the months remaining. A Marketplace plan can't start the same day job-based coverage ends. Coverage begins the first day of the month after the old plan ends, so a client who loses coverage March 7 and picks a plan by March 31 starts April 1 ( HealthCare.gov ). The 60-day window, and what resets it The SEP clock starts on the date job-based coverage actually ends, not the date COBRA is elected or declined. A client can apply for a Marketplace plan any time in that 60-day window even if they've already signed up for COBRA ( HealthCare.gov ). Outside that window and outside the annual Open Enrollment Period, a client already on COBRA can still switch to a Marketplace plan only if: Their COBRA coverage is running out (the 18-month maximum is ending), or Their former employer stops contributing, or they lose a COBRA subsidy, so they'd have to start paying the full cost, or They lost their job-based coverage involuntarily and are still within that original 60-day window. Voluntarily dropping COBRA early — simply deciding to stop paying the premium outside one of those triggers — does not open a new SEP. A client who does that has to wait for the next Open Enrollment Period (November 1 – January 15) unless another qualifying life event happens in the meantime ( HealthCare.gov ). This is the detail that causes the most support calls: a client assumes they can drop COBRA whenever they want and shop the Marketplace, and finds out mid-year that they can't. Why the cost comparison looks different this year The enhanced premium tax credits that made Marketplace plans sharply cheaper from 2021 through 2025 expired at the end of 2025 and were not renewed, so 2026 Marketplace premiums are calculated under the original ACA subsidy formula ( KFF ). Two changes matter for a client comparing COBRA to the Marketplace right now: The subsidy now stops at 400% of the federal poverty level. A client who earned too much for a subsidy before the pandemic will likely earn too much again. The enhanced credits had removed that cap; it's back for 2026. Subsidized enrollees are paying a larger share of income than they did in 2025. KFF estimates a single person earning about $35,000 (224% of the federal poverty level) paid around $1,033 a year toward a benchmark Marketplace plan under the enhanced credits, and about $2,615 under the 2026 rules — a $1,582 increase, before COBRA is even part of the comparison ( KFF ). That doesn't make COBRA the better deal by default — COBRA premiums didn't get cheaper either, and a client still has to pay 100% of a group premium plus the admin fee. It does mean the Marketplace isn't the automatic slam dunk on price it was in 2024 and 2025, and a client who assumes otherwise because they heard about Marketplace savings a few years ago is working from outdated information. The actual premium tax credit a client qualifies for is based on household income, family size and the benchmark silver plan in their county, determined when they apply ( IRS ). KFF's premium calculator is a reasonable way to get a client a rough number before they apply, though it isn't a substitute for a real quote. Example: walking a client through the comparison Illustrative example, not a real client. Say a 52-year-old client is laid off March 10 and loses job-based coverage the same day. Their former employer's COBRA packet quotes $780 a month for the plan they already had. Their household income for the year will land around $58,000, which puts them in range for a reduced premium tax credit under the 2026 rules, though well short of the $0-premium territory the enhanced credits used to reach for lower incomes. A Marketplace quote run from their client record comes back with a comparable silver plan at a lower net premium than the COBRA quote, but with a different provider network. The agent's job here isn't to pick for the client — it's to put both numbers and both networks in front of them before the clock runs out, note which one they chose and why, and set the SEP deadline (May 9, 60 days from March 10) as a task rather than a mental note. Marketplace coverage, if chosen, would start April 1; COBRA, if elected first and later dropped because it's "running out" or becomes unaffordable, would only re-open a Marketplace SEP under the specific triggers above — not simply because the client changed their mind in June. What to document for every job-loss conversation Because the SEP deadline and the COBRA-switch rules both turn on specific dates, the conversation is worth a few minutes of record-keeping, not just a verbal recommendation: The date job-based coverage actually ended (not the date the client called you). The 60-day SEP deadline, calculated from that date, as a follow-up task — not a note you'll have to remember. Whether the client was offered COBRA, and whether they elected it. If they're already on COBRA and want to switch later, which of the three triggers above applies, and when. The option they chose, tagged as a Special Enrollment Period enrollment rather than Open Enrollment, so your book reflects when and why the client came on. In AgencyView, a Marketplace quote run from the client record through the HealthSherpa connection turns the plan a client selects into a pending policy with its follow-up task already scheduled, and the enrollment itself can be recorded as a Special Enrollment Period case rather than lumped in with Open Enrollment business — useful when you're reviewing later how many clients came on through a SEP versus AEP or OEP. FAQ Is the ACA Marketplace cheaper than COBRA? It depends on income. A client with a subsidy-eligible income will usually pay less for a Marketplace plan than the full COBRA premium. A client above 400% of the federal poverty level gets no premium tax credit in 2026 and may find COBRA's network and lack of a new deductible more valuable than the price difference ( KFF ). How long does a client have to decide? 60 days from the date job-based coverage ends to enroll in a Marketplace plan, regardless of whether they also sign up for COBRA in the meantime ( HealthCare.gov ). Can a client switch from COBRA to the Marketplace mid-year? Only if COBRA is running out, the employer or a subsidy stops covering part of the cost, or they're still within the original 60-day window. Voluntarily dropping COBRA early outside those situations does not create a new Special Enrollment Period ( HealthCare.gov ). Do clients still qualify for a premium tax credit this year? The base premium tax credit is still available to people with household income in the eligible range who…
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