COBRA continuation usually means you pay the full premium plus a small administrative fee (often about 102% of the plan cost) after a job loss or other qualifying event. A COBRA premium subsidy is extra help that, in some years, paid part or all of that premium for a limited window. It is not automatic, not the same as a Marketplace premium tax credit (PTC), and not the specialized Health Coverage Tax Credit (HCTC).
Continuation mechanics and election timing: COBRA health coverage and COBRA election deadline. Job-loss cash triage: Handling a sudden job loss.
Full-freight COBRA vs temporary subsidy vs other credits
| Path | What it is | Typical consumer cue |
|---|---|---|
| Ordinary COBRA | You pay ~102% of the group premium | Default after most job losses when no special law is in force |
| Temporary COBRA premium assistance | Congress (or a state) pays a defined share for a defined window | Election notice and DOL/IRS model language say “premium assistance” or similar; dates are in the statute |
| Marketplace PTC / APTC | Subsidy for a HealthCare.gov or state-exchange plan | Different product and network; year-end Form 8962 reconciliation |
| HCTC | Narrow IRS credit for listed eligible groups | Not the default layoff path |
| Employer-paid COBRA in a severance packet | The employer pays months of COBRA as a benefit | Read the severance letter; this is not a federal subsidy |
The American Rescue Plan Act (ARPA) provided 100% COBRA premium assistance for many assistance-eligible individuals from April 1, 2021 through September 30, 2021 after involuntary termination or a reduction in hours. That window ended. As of 2026, ordinary job-loss COBRA is generally full freight unless a new federal or state program is in force or your employer pays as severance.
How to tell if help actually applies
- Read the COBRA election notice the plan administrator sends (often via WageWorks/HealthEquity-style vendors or the carrier). Subsidy language, if any, is in that packet—not in a cold call.
- Check current DOL Employee Benefits Security Administration and IRS pages for any open premium-assistance period before you budget $0 COBRA.
- Do not assume a Marketplace subsidy estimate means COBRA is free. PTC does not typically attach to COBRA premiums.
- If a temporary subsidy exists, calendar the start and end months. Missing a payment after the subsidy expires can terminate coverage after grace rules.
- State “mini-COBRA” rules can change who must offer continuation; they do not automatically add a premium subsidy.
Worked example: 2021-style help vs a 2026 layoff
Jordan is laid off. The old Blue Cross PPO costs the plan $1,720/month family; COBRA quotes $1,754/month (102%).
- If this were inside the 2021 ARPA window (educational history): assistance-eligible coverage could have been $0 employee premium for the statutory months, with the employer/plan recouping through the federal program then in force. Jordan would still elect on time and keep proof of eligibility.
- In a 2026-style year with no federal 100% subsidy: Jordan owes ~$1,754/month for COBRA. A HealthCare.gov silver plan after estimated PTC is $640/month. Jordan compares two months of COBRA (same surgeons, deductible already partly met) funded from an emergency fund against switching to the Marketplace for cash flow. No Form 8962 “COBRA subsidy” line fixes the 102% bill.
Lesson: price this year’s notice, not a headline from a prior stimulus year.
When a subsidy (or a short COBRA bridge) is still worth a close look
- A currently active federal or state premium-assistance period that your election notice describes
- Employer-paid COBRA months in a signed severance agreement
- A short COBRA bridge (subsidized or self-paid) because you are mid-treatment on the old network
When it often is not: assuming 2021 rules still apply, or skipping Marketplace quotes because a social post said “COBRA is free now.”
Checklist
- Save the COBRA election notice and search it for premium-assistance language.
- Confirm on current DOL/IRS pages whether any temporary subsidy is open.
- Do not confuse COBRA help with Marketplace PTC or HCTC.
- Calendar election and payment deadlines even if a subsidy is paying this month.
- Price Marketplace plans for the same effective date if COBRA is full freight.
- Keep proof of timely payment; coverage can end for nonpayment after grace rules.
Comparing full-freight COBRA to Marketplace SEP plans after a layoff: COBRA vs Marketplace SEP.
Educational only. Not insurance, tax, or legal advice. COBRA, mini-COBRA, premium assistance, PTC, and HCTC rules depend on statute, year, employer size, and your notice packet; read the election materials and confirm with the plan administrator and current DOL/IRS publications.