Texas COBRA Alternatives: Cheaper Coverage After a Job Loss

Medically reviewed by Jawad Arshad, MD, FACEP. Last reviewed: September 25, 2026.

Disclosure: This guide also mentions membership-based coverage. Membership-based coverage is not insurance, is not regulated as insurance, and does not count as ACA minimum essential coverage.

Texas COBRA alternatives start with the HealthCare.gov marketplace, because most Texans who lose a job qualify for a tax credit there and COBRA gets no tax credit at all. A spouse's employer plan, Texas state continuation and CHIP for kids are the other main options.

When someone in Austin or El Paso shows me a COBRA letter, the first thing I check is the monthly price. COBRA lets you keep the same plan, but you pay the full premium your employer used to split with you, plus a 2% fee. For a family, that is often more than $2,000 a month. For most people, the alternative is far cheaper.

Key facts (2026):

• COBRA lets you keep your job-based plan for up to 18 months at up to 102% of the full premium (U.S. Department of Labor, 2026).
• Texas state continuation adds up to 9 months when COBRA does not apply, or 6 more months after COBRA ends, for insured plans only (Texas Department of Insurance, 2026).
• About 92% of the nearly 4.2 million Texans who enrolled in marketplace coverage for 2026 got premium tax credits (CMS 2026 open enrollment data, via healthinsurance.org).
• Cigna and Baylor Scott & White are leaving the Texas marketplace after 2026, leaving 14 insurers for 2027 (healthinsurance.org, 2026).
• Texas has not expanded Medicaid, and about 605,000 Texans fall in the coverage gap (KFF, July 2026).

What Are the Best COBRA Alternatives in Texas?

The best COBRA alternatives in Texas are a subsidized HealthCare.gov plan, a spouse's employer plan, Texas state continuation, and Medicaid or CHIP for eligible children. Losing job-based coverage gives Texans a 60-day special enrollment period on HealthCare.gov, per HealthCare.gov.

COBRA is a federal law that lets workers at employers with 20 or more employees keep their group health plan after leaving a job, per the Department of Labor. The coverage is the same. The price is not, because the employer usually stops paying its share.

The rules are the same statewide. A worker in Frisco, Plano, Arlington or Irving has the same COBRA, state continuation and marketplace rights as someone in Houston. What changes by county is the list of marketplace insurers, since plan choice varies by county in Texas, per healthinsurance.org.

Our national guide to COBRA alternatives covers the same options for other states, and our COBRA health insurance guide explains COBRA election rules in detail.

How Much Does COBRA Cost in Texas?

COBRA in Texas costs up to 102% of the full group premium, which averaged about $792 a month for single coverage and $2,294 a month for family coverage in 2025, based on KFF's 2025 Employer Health Benefits Survey. Your actual price depends on your employer's plan.

KFF found average annual premiums of $9,325 for single coverage and $26,993 for family coverage in 2025. Divide by 12 and add the 2% COBRA fee, and the math looks like this.

Compare that with what Texans actually paid on the marketplace. The average Texas marketplace enrollee paid about $89 a month after tax credits for 2026, according to CMS 2026 open enrollment data reported by healthinsurance.org.

Worked example: a laid-off worker in Austin

Take a hypothetical single worker in Austin who earned $48,000 and was laid off in October. Her COBRA letter shows $792.63 a month. Her 2027 income estimate is $40,000 from a new part-time job.

The $89 figure is a statewide average, not her exact quote. Her real price depends on her age, county and plan. The point stands: at this income, COBRA almost always costs several times more than a subsidized marketplace plan.

Does Texas Have State Continuation Coverage?

Texas has state continuation coverage that lets people keep an insured employer plan for up to 9 months when COBRA does not apply, or 6 more months after COBRA ends, according to the Texas Department of Insurance (TDI). The person pays the full premium.

State continuation, sometimes called "mini-COBRA," is set by the Texas Insurance Code. It matters most for workers at small businesses with fewer than 20 employees, since federal COBRA does not cover those employers.

TDI notes one big limit: state continuation applies only to group plans issued by insurance companies and HMOs subject to the Texas Insurance Code. It does not apply to self-funded (ERISA) employer plans, which are exempt from state insurance law. Ask HR in writing whether your plan is fully insured or self-funded.

Can I Get a COBRA Alternative With an ACA Subsidy in Texas?

You can get a COBRA alternative with an ACA subsidy in Texas as long as you do not enroll in COBRA. Being offered COBRA does not block the premium tax credit, but enrolling in COBRA does for the months you are enrolled, per Treasury Regulation Section 1.36B-2(c)(3)(iv) and HealthCare.gov.

The ACA subsidy is the premium tax credit, a federal credit that lowers the monthly price of a HealthCare.gov plan. Texans qualify with household income from 100% to 400% of the federal poverty level. The enhanced credits expired after 2025, so since 2026 households above 400% get no credit, per healthinsurance.org. For a single person, 400% of the 2026 poverty guideline is $63,840.

Timing is the part people get wrong. Here are the rules that matter:

1. You get 60 days after job-based coverage ends to pick a HealthCare.gov plan, and you can also pick one up to 60 days before, per HealthCare.gov.
2. Voluntarily dropping COBRA does not open a special enrollment period. You would wait for open enrollment.
3. COBRA running out after the full 18 months does open a 60-day special enrollment period.
4. Open enrollment for 2027 runs November 1, 2026 through January 15, 2027 in Texas, per a CMS statement dated August 4, 2026.

If you are laid off near the end of the year, you can use either window. Our Texas open enrollment guide lists every 2027 date.

What Texas Marketplace Changes Matter for 2027?

Three Texas marketplace changes matter for 2027: two insurers are leaving, proposed premiums rose about 13.1% on average, and Gold plans often cost less than Silver after subsidy. Each one changes which plan beats COBRA.

Insurers leaving. Cigna and Baylor Scott & White are exiting after 2026, taking Texas from 16 marketplace insurers to 14, per healthinsurance.org.

Rate increases. Texas insurers proposed an average 13.1% increase for 2027 before subsidies, per healthinsurance.org's analysis of RateReview.HealthCare.gov filings. Tax credits rise with the benchmark plan, so subsidized enrollees feel less of it.

Gold before Silver. A TDI rule, 28 TAC Section 3.505, loads extra cost onto Silver premiums. That raises tax credits, which often makes Gold plans cheaper than Silver after subsidy. Gold plans were 41% of Texas plan selections for 2026, per CMS data reported by healthinsurance.org.

No Medicaid expansion. Texas has not expanded Medicaid, so most adults without children cannot get Medicaid at any income. KFF estimated in July 2026 that about 605,000 Texans are in the coverage gap. Children can still qualify for Medicaid or CHIP, so check that first for kids.

Our best health insurance in Texas guide compares insurers by region, and our New York COBRA alternatives guide shows how rules differ in a state with longer continuation.

When Should Texans Choose COBRA Instead?

Texans should choose COBRA when they are mid-treatment, have met most of their deductible, or earn above the subsidy cliff with high expected medical costs. Keeping the same network and deductible can be worth the higher premium for a few months.

• You are pregnant or in active treatment with doctors who are not in marketplace networks.
• You already met most of your deductible this year, and a new plan would restart it.
• You earn well above 400% of the poverty level, so a marketplace plan costs full price anyway.
• You need a short bridge of one or two months before a new job's plan starts.

COBRA has a useful safety feature. You have 60 days to elect it, and coverage is retroactive once you pay, per the Department of Labor. Some people pick a marketplace plan, then keep COBRA as a backup only until the new plan starts.

Is Membership-Based Coverage a COBRA Alternative in Texas?

Membership-based coverage is a COBRA alternative some healthy Texans use, but membership-based coverage is not insurance and does not count as ACA minimum essential coverage. It does not qualify for tax credits and does not have to cover pre-existing conditions.

Short-term health plans are another non-ACA option people ask about. In August 2025, the U.S. Departments of Labor, Health and Human Services and the Treasury said they would not enforce the 2024 rule that limited short-term plans to four months while they write new rules, per the Department of Labor. Texas insurance law still applies, and short-term plans can deny people with health conditions.

The membership on our individuals and families page includes virtual urgent and primary care, generic prescriptions, and a sharing program for eligible hospital and ER needs with a $2,500 out-of-pocket cap per need. It tends to fit people who earn just over the subsidy cliff and rarely use care.

Free copy-paste email to your former HR team

Subject: COBRA and continuation questions

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Hi, I am reviewing my health coverage options after my last day. Please confirm: (1) the exact date my current coverage ends, (2) my monthly COBRA premium for my coverage tier, (3) the date my COBRA election notice was sent and my election deadline, (4) whether our health plan is fully insured or self-funded, and (5) whether I qualify for Texas state continuation. Thank you.

Frequently Asked Questions

Sources

U.S. Department of Labor, COBRA continuation coverage guidance (2026) and Statement regarding short-term, limited-duration insurance (August 7, 2025); Texas Department of Insurance, Termination: COBRA and State Continuation (2026); HealthCare.gov, special enrollment period and COBRA guidance (2026); Treasury Regulation Section 1.36B-2(c)(3)(iv); KFF, 2025 Employer Health Benefits Survey; KFF coverage gap estimate (July 2026); healthinsurance.org, Texas Health Insurance Marketplace guide (September 2026), compiling CMS 2026 Marketplace Open Enrollment Period Public Use Files, RateReview.HealthCare.gov 2027 filings, and Texas Department of Insurance rule 28 TAC Section 3.505; Centers for Medicare and Medicaid Services, Updated Statement Regarding City of Columbus v. Kennedy (August 4, 2026); U.S. Department of Health and Human Services, 2026 Poverty Guidelines.