COBRA Alternatives in Alabama (2026)

Your options after leaving a job in Alabama

Leaving a job in Alabama usually means choosing between federal COBRA and a Marketplace plan. COBRA applies to employers with 20 or more employees and lets you keep the same plan, doctors and deductible progress for up to 18 months, but you pay the full premium plus up to 2%.

Alabama has no state continuation law for smaller employers. If your company had fewer than 20 employees, you generally cannot stay on the group plan after you leave. The only state rule covers a narrow case: a victim of domestic abuse covered under the abuser's policy who does not qualify for COBRA.

Losing job-based coverage opens a special enrollment period for Marketplace plans, so you do not have to wait for open enrollment. Because premium tax credits are based on your expected income for the year, a lower income after a layoff can mean a much cheaper Marketplace plan than COBRA. A licensed agent can compare the two side by side.

If your income drops very low, check Medicaid, but know its limits here. Alabama has not expanded Medicaid, so most adults without children do not qualify at any income, and parents qualify only at very low incomes.

How federal COBRA works

Federal COBRA lets you keep your former employer’s group plan if the employer had 20 or more employees. Coverage usually lasts up to 18 months, and you can be charged the full premium plus a 2% administrative fee, because your employer stops paying its share.

You generally have 60 days from your election notice to choose COBRA. Coverage is retroactive, so some people wait and only elect it if they need care during that window. Talk to an agent before relying on that, because missing the deadline ends the option.

Alabama state continuation

If you leave a job at an Alabama employer with 20 or more employees, federal COBRA usually lets you keep the same group plan for up to 18 months, at up to 102% of the full cost. If your employer had fewer than 20 employees, there is generally no state law that lets you keep the plan, so a Marketplace plan is usually the main option.

Marketplace plans and your special enrollment period

Losing job-based coverage opens a 60-day special enrollment period, so you don’t have to wait for open enrollment. In Alabama, HealthCare.gov is the federal government’s official marketplace for Alabama. We’re an independent, licensed insurance agency, not part of HealthCare.gov or any government agency, and we can help you compare Marketplace plans and enroll. Alabama uses the federal Marketplace and has no state-run exchange or state premium help. To have coverage start January 1, 2027, you must pick a plan by December 15, 2026; plans chosen December 16 to January 15 start February 1. A federal plan to shorten open enrollment was struck down in court in 2026, so the January 15 end date stands for 2027.

Marketplace premiums are based on your expected income for the year, not last year’s. If you’re between jobs, a lower income estimate can mean a much larger premium tax credit. The enhanced premium tax credits expired at the end of 2025. The House passed a three-year extension in January 2026, but the Senate has not passed it, so the original rules apply for 2026 and, unless Congress acts, for 2027. That means households earning more than 400% of the federal poverty level get no premium tax credit at all, and people below that line generally pay a larger share of their income than they did in 2025.

If your income dropped

Alabama has not expanded Medicaid. A working-age adult without dependent children generally cannot get Medicaid at any income unless they qualify another way, such as through a disability. Parents and caretaker relatives qualify only at very low incomes, about 18% of the federal poverty level as of January 2026.

Marketplace premium tax credits start at 100% of the federal poverty level, so adults with income below that line who do not qualify for Medicaid fall into a coverage gap with no subsidy and no Medicaid. Full-price Marketplace plans and other private options are still open to them.

What coverage costs