Definition
A federal right to keep your employer health plan after leaving a job, usually for up to 18 months, by paying the full premium yourself plus up to a 2% administrative fee. The coverage is identical; the employer subsidy is what disappears.
Why it matters
COBRA prevents a coverage gap mid-treatment, but the sticker shock is real: most people never see the full price of their plan while employed. Comparing COBRA against marketplace plans during the special enrollment window is worth an evening.
Example
A laid-off worker's family plan cost $1,800 a month, of which the employer paid $1,300. COBRA continues the exact plan at about $1,836 a month (full premium plus 2%), while a marketplace plan might cost less with different networks and deductibles.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.