Should I Get Individual Health Insurance or Take COBRA?

When you leave your job, one of the most important areas to consider is your health insurance. You will no longer be covered by your employer as part of your group plan. At this point, you can choose to take COBRA coverage or go out and find your own individual health insurance plan if you do not immediately get another job that offers health insurance or gain coverage through a spouse or by enrolling in Medicare.

Consolidated Omnibus Budget Reconciliation Act, or COBRA

The COBRA health insurance law allows you to keep your same group health insurance plan after you leave a job for a certain amount of time. This type of insurance is designed to be a transitional plan that makes it easier on you while you are looking for another job. You can stay on COBRA for as long as 18 months after you leave your current employer before you have to switch over to another insurance plan.


When trying to decide whether you should get an individual plan or go with COBRA, the cost is one of the important factors to consider. When trying to save money, you will find that an individual health insurance plan is often less expensive than going with COBRA. When you get COBRA, your employer will no longer be paying a part of your insurance premium for you. This will make the rate much higher than what you are used to.

Time Frame

When making this decision, you also have to look at your time frame. Try to determine exactly what you are going to do after leaving your job. If you plan to become self-employed or start your own business, an individual health insurance plan might make sense. If you plan to look for a new job, the COBRA coverage might make more sense. This way, you can simply keep your same insurance for a few months while you are between jobs.

Not Eligible

In some cases, you may find that you are ineligible for individual health insurance. If you have serious health complications, an individual health insurance company may not be able to provide coverage for you. With individual plans, you have to go through medical exams and questionnaires. With group coverage, you typically do not have to go through any of this and you are accepted automatically. In this case, it may be to your advantage to stay on COBRA and then move to another group plan when you get another job.