Self-Employed Health Insurance vs COBRA: A Side-by-Side Comparison
You left a job to work for yourself, and the COBRA election notice is sitting on the counter. The question is whether to keep the old employer plan at full price or buy your own coverage as a self-employed person. Here is the comparison laid out the way I walk clients through it: what each costs, how long it lasts, what network you get, and the handful of situations where COBRA is still the better buy.
The short answer
For a healthy person who is now self-employed, a plan you buy yourself usually costs less than COBRA and lasts as long as you want it to. COBRA wins when you are mid-treatment, have already met a big deductible this year, or have a condition that a private carrier would decline and the Marketplace plans in your county are weak.
Cost: who pays the premium
COBRA. You pay the full premium your employer was paying, plus up to 2 percent for administration. The plan did not change. You are simply seeing the whole bill for the first time instead of the share on your pay stub.
Self-employed coverage. There are two ways to buy it. A Marketplace plan is priced on your projected household income for the year, and a premium tax credit can shrink it when income is moderate. A private, medically underwritten plan is priced on your age, zip code and health history, not your income, and for people in good health it frequently comes in below both COBRA and the unsubsidized Marketplace price. The private health insurance cost guide breaks down what moves that number.
One more cost item that only applies once you are self-employed: premiums you pay for yourself and your family are generally deductible as an adjustment to income, up to your net profit, and that applies to COBRA premiums, Marketplace premiums and private premiums alike as long as you are not eligible for an employer plan. General information, not tax advice — confirm with your CPA based on your specific entity structure.
Duration: how long each one lasts
COBRA. Usually 18 months after you leave the job, sometimes 36 months for dependents after certain events. When it ends, it ends, and exhausting COBRA opens a special enrollment period on the Marketplace. Dropping it early on your own does not.
Self-employed coverage. A Marketplace plan renews every January for as long as you want it. A private plan renews on its own schedule as long as premiums are paid. Neither has a clock running. If you plan to be self-employed for more than a year and a half, COBRA is at best a bridge, not a destination.
Networks: what doctors you can see
COBRA. Exactly the network you had. If your employer plan was a large-group PPO, this is COBRA's strongest argument. Large-group networks are often broader than anything sold to individuals in the same county.
Self-employed coverage. Marketplace plans in much of Florida, including Hillsborough and Pinellas, are county-based HMOs with no out-of-network coverage. Private plans are often built on a national PPO, which matters if you travel for clients or split time between states.
Timing: when each one can start
COBRA. You have 60 days from the election notice to decide, and coverage is retroactive to the day the employer plan ended.
Self-employed coverage. Losing employer coverage opens a 60-day Marketplace special enrollment period. A private plan can be applied for any month and typically starts on the first of the month after approval, so the usual pattern is to apply right away and let COBRA's election window run as a safety net.
When COBRA is the right call
- You, your spouse or a child is in the middle of treatment, a pregnancy or a scheduled surgery.
- You have met most of this year's deductible, and starting a new plan would reset it to zero.
- You have a health condition that a private carrier would decline or exclude, and the Marketplace plans where you live do not include your specialist.
- You need a specific hospital system that only the old employer network covers.
When a self-employed plan wins
- You are in good health and the COBRA premium is more than a private quote. This is the most common outcome.
- Your household income this year will be moderate enough for a Marketplace subsidy, which COBRA never gets.
- You expect to be self-employed for longer than COBRA lasts.
- You want a national PPO because you work across state lines.
- You want the premium to run through your business as the self-employed deduction, which works the same on your own plan as on COBRA. General information, not tax advice — confirm with your CPA based on your specific entity structure.
A practical sequence for the first 60 days
- Get the exact date the employer plan ended, in writing, and the COBRA premium from the notice.
- Estimate your household income for this calendar year, net of business expenses.
- List current medications, ongoing treatment and the doctors you want to keep.
- Get a Marketplace price with the subsidy and a private quote side by side.
- Decide before day 60.
If you want the wider menu, including short-term bridges and what to do if a private carrier declines you, the COBRA alternatives guide covers those paths.
How I help
Send me the COBRA premium, your zip code, a rough income estimate and your doctor list, or request a quote. I run COBRA, the Marketplace with your subsidy and a private PPO next to each other and tell you which one I would choose in your spot. The carrier pays me, so there is no fee, and if COBRA is the better answer I will say so. Call or text (786) 218-2384.
Frequently asked questions
Is self-employed health insurance cheaper than COBRA?
Often, but not always. COBRA bills the full employer premium plus up to 2 percent. A healthy self-employed person can usually find a private plan for less, and a moderate-income household may get a Marketplace subsidy that COBRA cannot. If you are mid-treatment or have met a large deductible this year, COBRA can be cheaper overall.
How long can I stay on COBRA after going self-employed?
Generally 18 months after leaving the job. Some dependents qualify for up to 36 months after specific events. When COBRA runs out, that triggers a special enrollment period on the Marketplace.
Can I deduct COBRA premiums as a self-employed person?
Generally yes, under the self-employed health insurance deduction, provided you are not eligible for another employer plan and the deduction does not exceed your net profit. The same rule applies to Marketplace and private premiums. General information, not tax advice — confirm with your CPA based on your specific entity structure.
If I drop COBRA early, can I get a Marketplace plan?
Only during Open Enrollment or with a separate qualifying event. Voluntarily dropping COBRA does not open a special enrollment period. Exhausting COBRA at the end of its term does. A private plan can be applied for any month, which is why many people leave COBRA for a private plan mid-year.
Does COBRA have a better network than a self-employed plan?
Frequently, if the old plan was a large-group PPO. Many individual Marketplace plans in Florida are county HMOs. Private plans are often national PPOs. Check each option against your actual doctors and hospital before deciding.
Related guides
Last updated 2026-10-19. General information, not tax or legal advice.