So you decided to quit your job. Or maybe you lost your job when the company cut back. Perhaps you want to be your own boss and try your hand at freelancing.
Whatever the reason, if your traditional employment has ended, you may need to figure out what to do about health insurance.
If you’re under the age of 65 and don’t qualify for Medicare quite yet, 2 popular options include COBRA (Consolidated Omnibus Budget Reconciliation Act) and the Affordable Care Act (ACA) Marketplace.
Here’s a look at what these 2 programs are, and which one may be the best fit for you.
COBRA or the ACA Marketplace: What’s the difference?
COBRA is a federal law that allows you to keep yourself, your spouse, an ex-spouse and your dependents on your former company’s group health plan when your job ends. It generally applies to employers that have health coverage for at least 20 employees. Some states also have their own mini-COBRA laws for companies with fewer than 20 employees.1
When you choose COBRA, you’re opting to continue with the same health insurance plan you already have, says Caitlin Donovan, senior director of the Patient Advocate Foundation. You’ll be able to keep all your same doctors, and all your prescription medications should still be covered under your existing plan’s formulary. (That's the list of generic and brand-name prescription drugs covered by your health insurance plan.)
But you’ll have to cover the plan’s costs — which include monthly premiums (insurance bills), plus possibly an additional 2% administrative fee — by yourself. Coverage can last 18 to 36 months.2
If you need a minute to figure out your long-term health insurance coverage, a short term medical plan can be helpful for when there's a gap between major medical insurance policies. Call a licensed insurance agent at 1-844-211-7730 to learn more or visit uhone.com.
The ACA, on the other hand, is a health care reform law passed in 2010. The ACA Marketplace allows Americans to get health insurance coverage regardless of whether they have a preexisting condition, such as diabetes or cancer. It also has a list of essential health benefits that don’t change from plan to plan.
Under the ACA, you can pick a health plan from the ACA Marketplace or your state’s health insurance exchange (a website where you can buy insurance). But keep in mind that even if you purchase a plan from the same health insurance company, it may be different from the plan provided by your employer.
“You’ll want to make sure all your medical providers are still in network or, if they’re not, that you’re comfortable switching health care providers,” says Donovan. You’ll also need to make sure that your prescription meds are covered under your new plan’s drug formulary so that you don’t get hit with out-of-pocket costs.
Since you’ve just lost your job-based health coverage, you may qualify for a Special Enrollment Period, or SEP. This means you can enroll in one of these marketplace insurance plans if you do it within 60 days.3
A new healthcare plan may not have all the benefits you had before. If you need additional coverage for vision or dental, a supplemental insurance plan can help. Call 1-844-211-7730 and speak with a licensed insurance agent to learn more about your options.
COBRA or the ACA Marketplace: Which one is right for you?
If you’re looking for the cheaper option, that will generally be the ACA Marketplace, in Donovan's opinion. Your monthly premium payments may cost less on the exchange. This is especially true if you qualify for a premium tax credit, which is based on your state, household size, and overall income.
But other factors are at play, too. You need to consider the cost of deductibles (what you pay before the insurance company starts to pay for covered services), copayments (a fixed dollar amount you pay every time you use health services), and other out-of-pocket costs, says Donovan.
“If you’re close to meeting your deductible on your current insurance plan and you have high health care costs, it may be worth it to temporarily stay on your COBRA plan,” explains Donovan.
The same holds true if you’re far into your employer plan’s year and have already met your deductible. In this case, it may be best to stick with your current plan and go on COBRA.
COBRA or the ACA Marketplace: More things you should consider
While you may still be making up your mind on whether to go with COBRA or the ACA Marketplace, it’s worth keeping these 2 factors in mind:
- Your current health. If you’re undergoing treatment for a medical condition, you may be better off choosing COBRA to make sure you stay with your medical team, says Donovan. (If you do decide to switch to an ACA Marketplace healthcare plan, a preexisting condition won’t prevent you from enrolling in new coverage or having to pay more for it.)
- Your age. Check if your employer plan raises costs based on age. With an individual ACA Marketplace healthcare plan, premiums can be up to 3 times higher for older people than for younger ones.4
In Donovan’s opinion, while you might be tempted to hold on to your job-based health insurance via COBRA, it can be expensive. That’s why it could be good idea to explore all insurance options.
Find out more about available insurance plans and non-insurance products online or contact a licensed insurance agent at 1-844-211-7730 to learn more.
For informational purposes only. This information is compiled by UnitedHealthcare, and/or one of its affiliates, and does not diagnose problems or recommend specific treatment. Services and medical technologies referenced herein may not be covered under your plan. Please consult directly with your primary care physician if you need medical advice.Compliance code:
Compliance code:
52635-X-0925
Sources:
1. Medicare.gov. “COBRA Coverage.” Retrieved from https://www.medicare.gov/basics/get-started-with-medicare/medicare-basics/working-past-65/cobra-coverage Accessed September 3, 2025.
2. U.S. Department of Labor. “FAQs on COBRA continuation health coverage for workers.” Retrieved from https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/cobra-continuation-health-coverage-consumer.pdf Accessed September 3, 2025.
3. Healthcare.gov. “Special enrollment opportunities.” Retrieved from https://www.healthcare.gov/coverage-outside-open-enrollment/special-enrollment-period/ Accessed September 3, 2025.
4. Healthcare.gov. “How insurance companies set health premiums.” Retrieved from https://www.healthcare.gov/how-plans-set-your-premiums/ September 3, 2025.
