Coverage If You Lose Your Job in Texas: COBRA Against a Marketplace Plan

Losing job-based coverage opens two doors at the same moment: COBRA, which continues the employer plan you already have, and a Marketplace special enrollment period, because losing that coverage is a qualifying life event. They are decided against each other rather than one after the other, and the decisive question is usually simple: a premium tax credit can be applied to a Marketplace plan and never to COBRA¹² (HealthCare.gov, checked 30 July 2026).

I do community health worker visits as well as desk appointments, and the version of this I remember best was a kitchen table in a house outside Beaumont with two piles on it. On the left, the layoff packet: severance letter, a page about the 401(k), a form about returning a badge. On the right, the COBRA election notice, which had arrived separately and had been set aside because it looked like an offer rather than a deadline. The wife said the sentence I hear most often about that document: “we thought it was junk mail from the insurance company.” It was one of the two doors, and it had a date on it.

So this page is the arithmetic between those two doors, in the right order, with the Texas complication most national COBRA articles leave out. Nothing here is an eligibility determination: only the Marketplace can decide a premium tax credit and only HHSC can decide a Medicaid or CHIP case. Every figure below carries the date it was checked.

What opens when you lose job-based coverage?

Two rights, from two different systems, running on two different clocks. Losing job-based coverage is a qualifying life event, so it opens a special enrollment period allowing you to buy a Marketplace plan outside of open enrollment². Separately, if your former employer’s plan is subject to COBRA, you receive an election notice giving you the right to continue that plan yourself¹ (both checked 30 July 2026).

The two systems do not talk to each other, and neither warns you about the other. The COBRA notice comes from the employer or its plan administrator and says nothing about premium tax credits. HealthCare.gov does not know your election notice exists. That is the structural reason people end up on the more expensive option: they answer the letter that arrived, rather than comparing it against the thing that did not write to them.

Other events open a special enrollment period too, in general terms: marriage, a birth or adoption, a permanent move, and certain income or household changes³. The authoritative list, and the deadline, live on HealthCare.gov’s special enrollment period pages; this site does not publish either, for the reason given in the gap section below. Failing all of that, open enrollment starts 1 November, requires a 15 December sign-up for coverage on 1 January, and closes 15 January, with sign-ups between 16 December and 15 January starting 1 February⁴ (checked 30 July 2026). More at special enrollment periods.

What is COBRA, and what carries over?

COBRA is continuation of the very same employer plan, not a new plan that resembles it, and that is its whole advantage. The network is the same, so a doctor you already see stays in network. The benefit design is the same. And the deductible progress you have already made in the plan year carries over instead of resetting, which for somebody halfway through a course of treatment can be worth more than any premium difference¹ (checked 30 July 2026).

The cost side is where it turns. The enrollee generally pays the full cost of the coverage the employer had been sharing, so a premium that looked like a modest payroll deduction becomes the whole thing at once. Nothing about the plan got more expensive. The employer’s share stopped.

Three practical points that decide real cases:

• Read the election notice as a deadline document. It states the election period, the amount, and where to send it: the facts for your specific plan, which no website can replace.
• Mid-treatment is the strongest case for COBRA. Ongoing specialist care, a scheduled surgery, an authorized course of treatment, a deductible mostly met: continuity beats price in all of them.
• A premium tax credit cannot be applied to COBRA. Not partially, not later, not by any arrangement. Credits attach to Marketplace plans only¹.

What can a Marketplace plan do that COBRA cannot?

It can be subsidized. Premium tax credit eligibility runs from 100% to 400% of the federal poverty level⁵ (checked 30 July 2026), and for a household whose income has just fallen, that is frequently the difference between a payable premium and an impossible one. A laid-off household is measured on its expected income for the coverage year, not on last year’s salary, so the credit a person was ineligible for while employed can become available the month after.

The 2026 poverty guidelines for the 48 contiguous states, annual, are $15,960 for a household of 1, $21,640 for 2, $27,320 for 3, $33,000 for 4, $38,680 for 5, $44,360 for 6, $50,040 for 7 and $55,720 for 8, adding $5,680 for each additional person⁵. Note the lag rule before you compute anything: Marketplace eligibility for a plan year uses the prior year’s guidelines, while Medicaid and CHIP use the current year’s. Blurring those two produces answers that are wrong at exactly the margins that matter.

You also get to change plan level, which COBRA does not allow, so a household with no income can move to a cheaper tier and one that qualifies for cost sharing reductions has a reason to look at Silver. See picking a Marketplace plan and cost sharing reductions, and if what you are offered is not a Marketplace plan at all, read short-term plans and health shares first.

What 2026 did to the Marketplace side of the arithmetic

The enhanced premium tax credits expired at the end of 2025 and were not in force for plan year 2026, so the 400% FPL subsidy cliff came back. That changed the answer for a lot of households who compared COBRA against a Marketplace plan in an earlier year and remember what they concluded. All figures here are from KFF’s analysis of 2026 enrollment⁶ (checked 30 July 2026):

• Premium payments net of tax credits rose by 58% on average for people who signed up for 2026 coverage, which KFF elsewhere puts at about $780 more than the previous year.
• National enrollment fell for the first time in seven years.
• In Texas, sign-ups rose by about 206,000 (a 5% increase), while effectuated enrollment fell by about 146,000 (a 4% decrease). Those two numbers belong in the same sentence. The sign-up rise on its own reads as good news; the effectuated fall is the one that shows how many people could actually keep paying once the first premium came due.

So a comparison you did in 2023 is not evidence about 2026. Price both sides again. The position for plan year 2027 was still open when this page was checked on 30 July 2026, and this site says the credits expired at the end of 2025, with that date attached, rather than predicting what follows. Mechanics: how Marketplace subsidies work.

The Texas twist: a big income drop can take you below the subsidy floor

In most states the danger after a layoff is earning too much for help. In Texas the more common danger is earning too little, because the subsidy range has a floor at 100% of the federal poverty level and there is nothing underneath it. That is $15,960 a year for a household of one and $27,320 for a household of three at the 2026 guidelines⁵ (checked 30 July 2026). HealthCare.gov’s own wording below that line is that you probably will not qualify for savings on a Marketplace plan but may qualify for Medicaid.

In Texas, for most adults, you will not. The state is one of ten that have not adopted the ACA Medicaid expansion, while 41 states including the District of Columbia have⁷ (checked 30 July 2026), so a non-disabled, non-pregnant adult without dependent children has no Medicaid category at any income, and parents and caretaker relatives qualify only up to about 15% of the federal poverty level. The result is that about 605,000 poor uninsured Texan adults aged 19 to 64 sit in the coverage gap, roughly half the national total of about 1.2 million across the ten non-expansion states⁸ (KFF estimates based on the 2024 American Community Survey, checked 30 July 2026).

This is why the article exists on a Texas site rather than being a generic COBRA explainer. A layoff in Austin and a layoff in Phoenix produce different answers at the bottom of the income scale, and the Texas answer can be that neither door leads anywhere. Two things follow.

• Estimate your income for the whole coverage year, not for your worst month. Severance, unemployment compensation, a spouse’s earnings and any work you expect to pick up all count toward the annual figure the Marketplace uses, and an honest annual estimate frequently lands above 100% FPL when a single month’s cash flow does not: what counts as income in Texas.
• If you genuinely land in the gap, stop reapplying and change the question. The Texas coverage gap explains why the outcome is structural rather than a mistake on your form, and getting care without insurance in Texas lists what needs no coverage at all: the health center sliding scale, free and charitable clinics, and your county’s indigent program.

What else changes for the household

The children’s answer usually changes before the adults’ answer does, and it does not wait for an enrollment window. Medicaid and CHIP can be applied for at any time of year, and their limits are far above anything an adult can reach in Texas. On HHSC’s chart effective 1 April 2026: Children’s Medicaid at 198% of the federal poverty level for infants under 1, 144% for ages 1 to 5 and 133% for ages 6 to 18, and CHIP at 201%⁹ (checked 30 July 2026).

A household comfortably over those lines on a full salary can be under them the month after a layoff. One application at YourTexasBenefits is screened against Medicaid, CHIP and Healthy Texas Women together¹⁰, so it is one piece of work rather than three. A split result is normal here: children approved, adults denied. That is not a sign the form was filled in wrong, it is what a state without an adult category produces. See CHIP and Children’s Medicaid in Texas and applying through YourTexasBenefits, and if a decision comes back wrong on the facts, appealing a denial in Texas.

Also check whether a spouse’s employer plan has its own special enrollment right triggered by your loss of coverage. That is a plan document question for that employer’s benefits administrator.

What this page does not publish, and why

Everything a reader most wants to see as a number in this subject is missing here, and that is deliberate. The absent figures are:

• The length of the special enrollment period window. A figure is commonly quoted; it is not in this site’s verified set, so it is not printed here.
• The full, definitive list of qualifying life events. We name the common triggers in general terms and send you to the source for the complete list³.
• How many months COBRA can last. Not published here.
• The percentage of the premium a COBRA enrollee pays, and any administrative fee percentage on top of it. Not published here.
• Any premium figure at all, for COBRA or for a Marketplace plan.

The reasoning is sharper here than almost anywhere else on this site, because these numbers are deadlines rather than descriptions. Time a special enrollment period off a figure from a blog, and if the real deadline is shorter you lose the year. Read a COBRA cost percentage that is close but not right, and you compare the wrong two numbers with real money attached. A blank that names the office is safer than a plausible number.

Here is where each of them lives:

• Your COBRA election notice, from the former employer or the plan administrator, holds the election deadline, the duration and the exact amount for your plan. It is the authoritative document for your case, and it is why that envelope is not junk mail.
• HealthCare.gov holds the special enrollment period deadline and the qualifying event list²³, and its application prices your own household including any premium tax credit¹¹.
• A free assister will do the comparison with you at no charge. Assisters certified by the Exchange are prohibited from charging applicants and from taking payment from an insurer in connection with an enrollment, which is the difference between them and a commissioned salesperson. Find one at localhelp.healthcare.gov¹² (checked 30 July 2026).

Doing it in the right order

Price both doors before you answer either letter, and do it in the first week rather than the last. The order below is driven by the premium tax credit band, which runs from 100% to 400% of the federal poverty level⁵ (checked 30 July 2026): until you have an honest annual income estimate you cannot know which side of either edge you land on, so the estimate comes before the plan choice rather than after it. Timing in the year matters too. If the layoff lands near the turn of the year, open enrollment is running anyway from 1 November to 15 January⁴ (checked 30 July 2026), and you may not need a special enrollment period at all.

1. Find the COBRA election notice and write down its deadline and its monthly amount.
2. Run the Marketplace application at HealthCare.gov with an honest estimate of your income for the whole coverage year. It prices the credit and the net premium for your household, which no article can.
3. Apply for the children at YourTexasBenefits at the same time, since that runs on its own timetable¹⁰.
4. Compare on total cost, not premium. Deductible progress already made, whether your doctors are in each network, and what a plan year restart costs mid-treatment all belong in it. See Marketplace plans in Texas.
5. Ask before you cancel anything. Taking COBRA does not shut the Marketplace door permanently, but the timing rules govern when you can move¹. Put that question to HealthCare.gov or an assister in advance.

Where all of this sits against the other routes into coverage in this state is mapped in health coverage in Texas, and the Medicaid side of the picture is in Texas Medicaid eligibility.

Texas Care Map is independent. It has no relationship with the State of Texas, HHSC, the Texas Department of Insurance or the Centers for Medicare and Medicaid Services, it sells nothing, and it cannot determine your eligibility for COBRA or for a premium tax credit.