COBRA After Leaving a Job: Is It Worth It for the Self-Employed?
COBRA keeps your old plan but at full price plus admin. How it stacks up against working owner group health.
COBRA lets you keep the exact health plan you had at your old W-2 job for up to 18 months. The catch: you now pay the full premium that your employer was subsidizing, plus a 2% admin fee on top.
The real cost of COBRA
Most people don't realize how much of their premium the employer was covering until the first COBRA invoice shows up. For a family plan, COBRA frequently runs 1.8x to 2x what the ACA marketplace charges for the same tier of coverage.
If you're leaving W-2 employment to start something on your own, COBRA is almost never the cheapest long-term answer. It's useful as a bridge for a month or two, especially if you're mid-procedure with an existing doctor, but it's not the plan you want to carry through year three of self-employment.
What to compare it against
A working owner group plan will usually land well below COBRA and somewhat below the ACA marketplace. Check the specific PPO network you care about, since if your doctors happen to be in-network on both, the right choice is usually the cheapest one.