Navigating health insurance after job loss or major life changes can feel overwhelming. That’s where COBRA (Consolidated Omnibus Budget Reconciliation Act) comes in — a federal law that lets you continue your employer-sponsored health insurance for a limited time. However, many people make mistakes during the COBRA application process, resulting in loss of coverage, missed deadlines, or paying higher premiums than necessary.
This 2025 guide will walk you through the top mistakes to avoid when applying for COBRA benefits, so you can stay covered without unnecessary stress or expense.
What Is COBRA?
COBRA allows eligible individuals to retain group health insurance coverage after certain qualifying events, such as:
- Job loss (except for gross misconduct)
- Reduction in work hours
- Divorce or legal separation
- Death of the covered employee
- A dependent aging out of a parent’s plan
COBRA Coverage Duration:
- 18 months for job loss or reduced hours
- 29 months for individuals with disabilities
- 36 months for spouses or dependents due to divorce, legal separation, or death
Top COBRA Mistakes to Avoid in 2025
1. Missing the 60-Day Election Deadline
- Mistake: Thinking COBRA enrollment happens automatically
- Impact: If you don’t apply within 60 days, you lose your right to COBRA
- Solution: Mark your calendar and submit the COBRA election form quickly
2. Not Recognizing a Qualifying Event
- Mistake: Believing COBRA is only for job loss
- Impact: You may miss eligibility if coverage ends due to divorce, legal separation, or reduced hours
- Solution: Ask your HR department if your life change qualifies
3. Failing to Notify Your Plan Administrator
- Mistake: Relying on your employer to handle everything
- Impact: Your employer might not notify the insurer
- Solution: Send written notice of qualifying events to your plan administrator
4. Assuming COBRA Covers All Benefits
- Mistake: Thinking it includes dental, vision, or life insurance
- Impact: COBRA only applies to medical coverage in most cases
- Solution: Check which benefits are included with your COBRA offer
5. Miscalculating Premium Costs
- Mistake: Assuming your employer pays a part of the premium
- Impact: You pay 100% of the premium + 2% admin fee
- Solution: Compare COBRA with HealthCare.gov plans or Medicaid
6. Ignoring Affordable Alternatives
- Mistake: Not exploring marketplace insurance, Medicaid, or spouse’s employer plans
- Impact: You might overpay for coverage
- Solution: Shop for better rates and coverage using HealthCare.gov, state exchanges, or independent brokers
7. Missing COBRA Payment Deadlines
- Mistake: Forgetting to pay premiums on time
- Impact: Coverage ends immediately if payments are missed
- Solution: Set up automatic payments or reminders
8. Overlooking State-Specific COBRA Laws
- Mistake: Ignoring state “mini-COBRA” rules
- Impact: You may miss extra coverage rights in states like California, New York, or Massachusetts
- Solution: Contact your state insurance department to learn more
9. Misunderstanding Medicare and COBRA
- Mistake: Assuming COBRA can replace Medicare
- Impact: You may face coverage gaps or penalties
- Solution: If you’re eligible, enroll in Medicare to avoid issues
10. Skipping Professional Help
- Mistake: Navigating COBRA on your own
- Impact: A small mistake can cost you thousands
- Solution: Get advice from an HR representative, health insurance broker, or benefits advisor
COBRA vs. Marketplace Plans in 2025
| Feature | COBRA | Marketplace (HealthCare.gov) |
|---|---|---|
| Eligibility | After qualifying event | Open to all residents |
| Cost | 100% of premium + 2% fee | Subsidies available based on income |
| Coverage Duration | 18–36 months | Annual plans, renewable |
| Includes Dental/Vision | Usually not | Some plans include it |
| Flexibility | Limited to employer’s plan | Multiple plans and providers |
Pro Tips to Manage COBRA Better
- Use reminders in apps like Google Calendar for deadlines and payments
- Save all documents and emails related to COBRA elections and coverage
- Inform family members or next of kin about your coverage status
- Explore tax credits for marketplace insurance to save money
Final Thoughts
COBRA is a valuable bridge during times of transition, offering continued health coverage when you need it most. But it’s also expensive and deadline-sensitive, so making informed choices is critical.
Always compare your options, act quickly, and consult professionals to ensure your healthcare doesn’t lapse. Whether you’ve lost a job, experienced divorce, or recently retired, understanding COBRA in 2025 can save you from unexpected medical bills and stress.
FAQs About COBRA Benefits
How much does COBRA cost in 2025?
You pay the full monthly premium of the group health plan plus a 2% admin fee.
Can I cancel COBRA at any time?
Yes, COBRA is voluntary. You can cancel if you find better coverage.
Can I extend COBRA beyond 18 months?
Yes, under special circumstances like disability, COBRA can extend to 29 months, and 36 months for dependents.
What if I miss my first payment?
Missing your first COBRA premium means automatic termination of coverage.
What if my employer shuts down?
If your employer’s health plan ends, COBRA is no longer available.
