Guide

Replacing employer health coverage: COBRA, the Marketplace, and the two 60-day windows

Summary

A clinician leaving a salaried job to open a practice rarely has to choose between COBRA and the Marketplace on one day: the two 60-day windows overlap. COBRA election runs at least 60 days from the later of the coverage-loss date or the election notice, and Marketplace shopping opens up to 60 days before job-based coverage ends. Being offered COBRA does not cost the premium tax credit. Electing it can.

By Gale Editorial · Updated 2026-09-02. Every figure cited to a dated source. How we write.

Two 60-day windows, running at the same time

Both windows are 60 days long and they overlap. The COBRA election period must run at least 60 days, counted from whichever comes later: the date group coverage would otherwise end, or the date the election notice is provided to you 1Ref 1Office of the Law Revision Counsel, U.S. House of Representatives (2026).29 U.S.C. §1165 — Election.The federal COBRA election period: at least 60 days, running from the later of the date group coverage would otherwise end or the date the plan sends the election notice.. For a loss of job-based coverage, the Marketplace opens 60 days before the loss and 60 days after it 2Ref 2Centers for Medicare & Medicaid Services / U.S. Department of Health and Human Services (2026).45 CFR §155.420 — Special enrollment periods.The Marketplace special enrollment period: 60 days from a triggering event, the 60-days-before-and-after availability for a loss of minimum essential coverage, and the carve-out under which voluntarily dropping COBRA or stopping its premiums is not a loss of coverage, except where an employer completely ceases its COBRA contributions.. Nothing forces the two decisions into sequence.

Everything here is the federal rule, and it binds every Exchange, a state-run one included, though the section leaves a state-run Exchange some options inside it 2Ref 2Centers for Medicare & Medicaid Services / U.S. Department of Health and Human Services (2026).45 CFR §155.420 — Special enrollment periods.The Marketplace special enrollment period: 60 days from a triggering event, the 60-days-before-and-after availability for a loss of minimum essential coverage, and the carve-out under which voluntarily dropping COBRA or stopping its premiums is not a loss of coverage, except where an employer completely ceases its COBRA contributions.. Some states also run continuation-coverage rules of their own, mostly reaching employers too small for federal COBRA, and none of the federal sections behind this page settles what yours says. Confirm both with your state's exchange and its insurance department before you commit to a date.

The election notice is the artifact to keep. Its date is one of the two possible starts for the COBRA clock, and it is the one you do not control 1Ref 1Office of the Law Revision Counsel, U.S. House of Representatives (2026).29 U.S.C. §1165 — Election.The federal COBRA election period: at least 60 days, running from the later of the date group coverage would otherwise end or the date the plan sends the election notice.. Treasury's regulation on electing continuation coverage runs the same rule through examples in which the employer keeps paying for coverage for a period after the termination date. Whether that moves the start depends on the terms: if the paid coverage continues unconditionally, the loss of coverage moves later and the clock moves with it; if it is offered only to people who waive COBRA, the loss stays on the termination date and the clock does not move 3Ref 3Internal Revenue Service / U.S. Department of the Treasury (2026).26 CFR §54.4980B-6 — Electing COBRA continuation coverage.Treasury's regulatory restatement of the same 60-day election floor, and its worked examples on when an employer's payment for coverage after the termination date shifts the start of the election period and when it does not.. Read the severance terms and the notice against each other before counting days.

What COBRA costs once the employer stops paying

COBRA charges the whole premium, not the payroll deduction. A plan may bill a continuing enrollee up to 102% of the cost of the coverage: the employee's share, the employer's share, and 2% for administration 4Ref 4U.S. Department of Labor, Employee Benefits Security Administration (EBSA) (2019).An Employee's Guide to Health Benefits Under COBRA.The plain-language breakdown of the 102 percent premium cap into the employee's share, the employer's share and a 2 percent administrative add-on, and the Department of Labor's statement that being offered COBRA does not limit eligibility for Marketplace coverage or for a tax credit.. The statute caps it there, and lifts the ceiling to 150% only for the months after the 18th, the extra 11 months a disability-based extension can add, which runs continuation coverage out to 29 in total 5Ref 5Office of the Law Revision Counsel, U.S. House of Representatives (2026).29 U.S.C. §1162 — Continuation coverage.The statutory premium ceiling of 102 percent of the applicable premium, the 150 percent ceiling for months after the 18th month of continuation coverage, and the rule that no premium may be demanded sooner than 45 days after election..

A plan cannot require the first COBRA premium any earlier than 45 days after the election is made 5Ref 5Office of the Law Revision Counsel, U.S. House of Representatives (2026).29 U.S.C. §1162 — Continuation coverage.The statutory premium ceiling of 102 percent of the applicable premium, the 150 percent ceiling for months after the 18th month of continuation coverage, and the rule that no premium may be demanded sooner than 45 days after election.. Elect on day 55 of the election window and the first bill still cannot fall due for another 45 days, a stretch of weeks in which a new practice is paying for a business license, a first month of rent and a malpractice policy.

But price alone does not settle it. Continuation keeps the household inside the plan it is already using: the same network, the same prior authorizations in flight, the same accumulated deductible. A new insurer may or may not credit what has already been spent toward this year's deductible and out-of-pocket maximum. Ask before you switch, and get the answer in writing.

Does an offer of COBRA cost you the premium tax credit?

No. The IRS does not count post-employment coverage such as COBRA as coverage you are eligible for unless you enroll in it 6Ref 6Internal Revenue Service (2025).2025 Instructions for Form 8962, Premium Tax Credit (PTC).The IRS treatment of post-employment coverage: a person offered COBRA after leaving a job is not considered eligible for that coverage, for premium tax credit purposes, unless they enroll in it., and the Department of Labor says the same thing in plain words: being offered continuation coverage does not limit eligibility for Marketplace coverage or for a tax credit 4Ref 4U.S. Department of Labor, Employee Benefits Security Administration (EBSA) (2019).An Employee's Guide to Health Benefits Under COBRA.The plain-language breakdown of the 102 percent premium cap into the employee's share, the employer's share and a 2 percent administrative add-on, and the Department of Labor's statement that being offered COBRA does not limit eligibility for Marketplace coverage or for a tax credit.. The offer sitting in the envelope changes nothing about a subsidy.

But the election runs the other way. Once someone elects COBRA, giving it up before it runs its course is a voluntary termination, and stopping the premium payments counts as one, with two exceptions the rule names: if an employer that was paying all or part of the COBRA premium completely stops, or a government subsidy of the coverage entirely ceases, that cessation is itself a triggering event 2Ref 2Centers for Medicare & Medicaid Services / U.S. Department of Health and Human Services (2026).45 CFR §155.420 — Special enrollment periods.The Marketplace special enrollment period: 60 days from a triggering event, the 60-days-before-and-after availability for a loss of minimum essential coverage, and the carve-out under which voluntarily dropping COBRA or stopping its premiums is not a loss of coverage, except where an employer completely ceases its COBRA contributions.. Otherwise neither is a loss of coverage, so neither opens a special enrollment period. A clinician who elects in June and finds the premium unaffordable in September can be left with no route onto a Marketplace plan until the next open enrollment.

Priced in the other order, both doors stay open. A Marketplace quote costs nothing to obtain, the credit can be estimated on it, and the COBRA election is still there on the last day of its window.

Your income is a projection, and the credit is built on it

A new practice's first-year income is an estimate, and the premium tax credit is computed from it. For a self-employed person the arithmetic loops: the self-employed health insurance deduction changes the income the credit is measured against, and the credit changes the deduction 7Ref 7Internal Revenue Service (2025).Publication 974 (2025), Premium Tax Credit (PTC).The circularity between the self-employed health insurance deduction and the premium tax credit, and the publication's worksheets and its iterative and simplified calculation methods.. The IRS publishes no single formula for this. Publication 974 supplies worksheets and both an iterative method and a simplified one 7Ref 7Internal Revenue Service (2025).Publication 974 (2025), Premium Tax Credit (PTC).The circularity between the self-employed health insurance deduction and the premium tax credit, and the publication's worksheets and its iterative and simplified calculation methods..

Run it with your CPA before the application asks for a household income figure, and run it twice: once on the income a practice earns if the panel fills on schedule, once on a slower first year. Two projections can point at two different plans, and the gap between them is the part of this decision worth an hour of billable time.

What happens when the year lands somewhere other than the estimate is a reconciliation question for the tax return, and none of the sources behind this page answers it. Put it on the CPA's list with the rest.

A calendar for the last month of employment

Most of what follows is a calendar problem, and only one of its dates is the last day of work. Two of them are set by other people: the date the notice is provided to you, and the date coverage would otherwise end. Put every window below on one calendar the week the resignation letter goes in, and keep the notice that starts the COBRA clock 1Ref 1Office of the Law Revision Counsel, U.S. House of Representatives (2026).29 U.S.C. §1165 — Election.The federal COBRA election period: at least 60 days, running from the later of the date group coverage would otherwise end or the date the plan sends the election notice..

Window	What it controls	Where the rule lives
60 days before job-based coverage ends	Marketplace selection is already open under the advanced-availability rule for a loss of minimum essential coverage 2Ref 2Centers for Medicare & Medicaid Services / U.S. Department of Health and Human Services (2026).45 CFR §155.420 — Special enrollment periods.The Marketplace special enrollment period: 60 days from a triggering event, the 60-days-before-and-after availability for a loss of minimum essential coverage, and the carve-out under which voluntarily dropping COBRA or stopping its premiums is not a loss of coverage, except where an employer completely ceases its COBRA contributions.	45 CFR §155.420(c)(2)
60 days after the later of the coverage-loss date or the election notice	The COBRA election period, as a federal minimum 1Ref 1Office of the Law Revision Counsel, U.S. House of Representatives (2026).29 U.S.C. §1165 — Election.The federal COBRA election period: at least 60 days, running from the later of the date group coverage would otherwise end or the date the plan sends the election notice.	29 U.S.C. §1165
60 days after the triggering event	Last day to select a Marketplace plan under the special enrollment period 2Ref 2Centers for Medicare & Medicaid Services / U.S. Department of Health and Human Services (2026).45 CFR §155.420 — Special enrollment periods.The Marketplace special enrollment period: 60 days from a triggering event, the 60-days-before-and-after availability for a loss of minimum essential coverage, and the carve-out under which voluntarily dropping COBRA or stopping its premiums is not a loss of coverage, except where an employer completely ceases its COBRA contributions.	45 CFR §155.420(c)(2)
45 days after the COBRA election	Earliest a plan may demand the first premium 5Ref 5Office of the Law Revision Counsel, U.S. House of Representatives (2026).29 U.S.C. §1162 — Continuation coverage.The statutory premium ceiling of 102 percent of the applicable premium, the 150 percent ceiling for months after the 18th month of continuation coverage, and the rule that no premium may be demanded sooner than 45 days after election.	29 U.S.C. §1162(3)
Any time after a COBRA election	Giving the coverage up early is a voluntary termination and opens no new window, unless an employer paying all or part of the premium, or a government subsidy of it, stops entirely 2Ref 2Centers for Medicare & Medicaid Services / U.S. Department of Health and Human Services (2026).45 CFR §155.420 — Special enrollment periods.The Marketplace special enrollment period: 60 days from a triggering event, the 60-days-before-and-after availability for a loss of minimum essential coverage, and the carve-out under which voluntarily dropping COBRA or stopping its premiums is not a loss of coverage, except where an employer completely ceases its COBRA contributions.	45 CFR §155.420(e)

A state-run exchange can take options the federal section itself leaves open, and a plan can be more generous than the COBRA minimum. Check yours rather than inheriting the table.

The coverage decision is one line in a longer list

Health coverage is the loudest line in what a departing clinician has to plan for, and it is not the only one. Working the stack in order matters, because some purchases gate others: the entity and its tax election before payroll, the malpractice tail before the last day on the old policy, own-occupation disability coverage while a salary still exists.

But the ordering only helps if the dates are real. A tail quote, a first COBRA bill and a first malpractice premium can land in the same 30-day stretch, before the practice has been paid for a single visit. Price the whole month, not the line.

What to do in the first week after the notice arrives

The first week after the notice arrives is where the dates get fixed. Ask the plan administrator for the plan's full premium for your coverage tier, which is the figure COBRA's cap is computed on 4Ref 4U.S. Department of Labor, Employee Benefits Security Administration (EBSA) (2019).An Employee's Guide to Health Benefits Under COBRA.The plain-language breakdown of the 102 percent premium cap into the employee's share, the employer's share and a 2 percent administrative add-on, and the Department of Labor's statement that being offered COBRA does not limit eligibility for Marketplace coverage or for a tax credit.. Price the same household on your own exchange with the credit applied, and keep both numbers where you can see them on the same page.

Ask for the election notice in writing and record the date it was provided to you, because that date can be the later of the two that start the 60-day clock 1Ref 1Office of the Law Revision Counsel, U.S. House of Representatives (2026).29 U.S.C. §1165 — Election.The federal COBRA election period: at least 60 days, running from the later of the date group coverage would otherwise end or the date the plan sends the election notice..
Ask whether the employer is paying for any period of coverage after the termination date, and whether that coverage is conditioned on waiving COBRA: the first moves the start of the election period, the second does not 3Ref 3Internal Revenue Service / U.S. Department of the Treasury (2026).26 CFR §54.4980B-6 — Electing COBRA continuation coverage.Treasury's regulatory restatement of the same 60-day election floor, and its worked examples on when an employer's payment for coverage after the termination date shifts the start of the election period and when it does not..
Run the deduction and the credit together with your CPA, on two income projections, before entering a household income on the application 7Ref 7Internal Revenue Service (2025).Publication 974 (2025), Premium Tax Credit (PTC).The circularity between the self-employed health insurance deduction and the premium tax credit, and the publication's worksheets and its iterative and simplified calculation methods..
Check whether your state runs its own exchange and what its windows say, because the section cited here leaves a state-run exchange options inside it 2Ref 2Centers for Medicare & Medicaid Services / U.S. Department of Health and Human Services (2026).45 CFR §155.420 — Special enrollment periods.The Marketplace special enrollment period: 60 days from a triggering event, the 60-days-before-and-after availability for a loss of minimum essential coverage, and the carve-out under which voluntarily dropping COBRA or stopping its premiums is not a loss of coverage, except where an employer completely ceases its COBRA contributions..

The election does not close the Marketplace window that the coverage loss opened; that one runs its 60 days either way 2Ref 2Centers for Medicare & Medicaid Services / U.S. Department of Health and Human Services (2026).45 CFR §155.420 — Special enrollment periods.The Marketplace special enrollment period: 60 days from a triggering event, the 60-days-before-and-after availability for a loss of minimum essential coverage, and the carve-out under which voluntarily dropping COBRA or stopping its premiums is not a loss of coverage, except where an employer completely ceases its COBRA contributions.. What closes is everything after it: once those 60 days are gone, dropping COBRA on your own opens nothing, and without another qualifying event the next chance to move is open enrollment.

Common questions

At least 60 days, counted from whichever comes later: the date your group coverage would otherwise end, or the date your election notice is provided to you. That is the federal floor, and a plan is free to be more generous than it. Keep the notice and record when it arrived; that date is one of the two triggers, and it is set by the plan.

No. Being offered post-employment coverage does not make you eligible for it in the tax sense; that happens only if you enroll, and the Department of Labor says the same thing plainly in its own COBRA booklet. Enrolling is what changes things. Once you enroll in COBRA, dropping it partway through is a voluntary termination, and short of another qualifying event it opens no new enrollment window.

Because the paycheck line was only your share. A plan may charge a continuing enrollee up to 102 percent of the cost of the coverage, which is your old share plus the employer's share plus 2 percent for administration. The ceiling rises to 150 percent only after the 18th month, during the extension a disability determination can add.

Not on your own timing. Dropping COBRA before it runs its course, including by stopping the premium payments, counts as a voluntary termination rather than a loss of coverage, so it opens no special enrollment period, unless an employer paying all or part of the premium, or a government subsidy of it, stops entirely. Short of that or another qualifying event, the next chance to move is open enrollment. Get both prices in hand before you make the election.

It can, and it turns on the terms. Treasury's regulation on electing continuation coverage works through examples where the employer pays for coverage after the termination date. Paid coverage that continues unconditionally starts the election period later; a package offered only to people who waive COBRA leaves the start on the termination date. Read the severance agreement beside the election notice, and ask the plan administrator in writing which date the plan is using.

It can, in two places. A state-run exchange works inside the same federal section but can take options the section leaves open, and some states run continuation-coverage rules of their own, mostly reaching employers too small for federal COBRA. The federal sections behind this page settle neither one. Check your state's exchange and its insurance department before you rely on a date.

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References

1.Office of the Law Revision Counsel, U.S. House of Representatives (2026). 29 U.S.C. §1165 — Election. United States Code, Title 29—Labor, Chapter 18 (ERISA), Part 6 (continuation coverage). link ✓The federal COBRA election period: at least 60 days, running from the later of the date group coverage would otherwise end or the date the plan sends the election notice.
2.Centers for Medicare & Medicaid Services / U.S. Department of Health and Human Services (2026). 45 CFR §155.420 — Special enrollment periods. Code of Federal Regulations, Title 45, Part 155 (via eCFR, current). link ✓The Marketplace special enrollment period: 60 days from a triggering event, the 60-days-before-and-after availability for a loss of minimum essential coverage, and the carve-out under which voluntarily dropping COBRA or stopping its premiums is not a loss of coverage, except where an employer completely ceases its COBRA contributions.
3.Internal Revenue Service / U.S. Department of the Treasury (2026). 26 CFR §54.4980B-6 — Electing COBRA continuation coverage. Code of Federal Regulations, Title 26, Part 54 (via eCFR, current). link ✓Treasury's regulatory restatement of the same 60-day election floor, and its worked examples on when an employer's payment for coverage after the termination date shifts the start of the election period and when it does not.
4.U.S. Department of Labor, Employee Benefits Security Administration (EBSA) (2019). An Employee's Guide to Health Benefits Under COBRA. DOL.gov — EBSA Publications. link ✓The plain-language breakdown of the 102 percent premium cap into the employee's share, the employer's share and a 2 percent administrative add-on, and the Department of Labor's statement that being offered COBRA does not limit eligibility for Marketplace coverage or for a tax credit.
5.Office of the Law Revision Counsel, U.S. House of Representatives (2026). 29 U.S.C. §1162 — Continuation coverage. United States Code, Title 29—Labor, Chapter 18 (ERISA), Part 6 (continuation coverage). link ✓The statutory premium ceiling of 102 percent of the applicable premium, the 150 percent ceiling for months after the 18th month of continuation coverage, and the rule that no premium may be demanded sooner than 45 days after election.
6.Internal Revenue Service (2025). 2025 Instructions for Form 8962, Premium Tax Credit (PTC). IRS.gov — Forms & Instructions (PDF). link ✓The IRS treatment of post-employment coverage: a person offered COBRA after leaving a job is not considered eligible for that coverage, for premium tax credit purposes, unless they enroll in it.
7.Internal Revenue Service (2025). Publication 974 (2025), Premium Tax Credit (PTC). IRS.gov — Publications. link ✓The circularity between the self-employed health insurance deduction and the premium tax credit, and the publication's worksheets and its iterative and simplified calculation methods.

https://www.gale.care/for-providers/se-cobra-vs-marketplace-exit · 7 sources. Competitor details are cited to dated public sources and maintained as they change; figures are estimates, not commitments. Synthetic demonstration.

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