COBRA Alternatives in Illinois (2026)

Your options after leaving a job in Illinois

Losing a job in Illinois usually gives you three paths: federal COBRA, Illinois state continuation, or a new Marketplace plan. COBRA covers employers with 20 or more workers and can last 18 months, but you pay the full premium plus up to a 2% fee.

Illinois continuation reaches further. It applies to insured group plans of any size, including small employers COBRA skips, and lasts up to 12 months at no more than the group rate. If both laws apply, your employer must offer both and you pick one. Spouses get extra protection: a divorced or widowed spouse can stay on for up to 2 years, and a spouse age 55 or older can stay on until Medicare.

Losing job-based coverage also opens a special enrollment period, so you can apply through Get Covered Illinois instead of taking COBRA. Marketplace coverage starts going forward, not backward, so apply before your old plan ends if you can. If you choose COBRA, you generally have to wait for open enrollment or another qualifying event to switch, and dropping COBRA payments does not count.

If your income dropped sharply, check Medicaid. Illinois covers adults 19 to 64 with income up to about 138% of the poverty level, and you can apply any time.

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.

Illinois continuation law (215 ILCS 5/367e) and Illinois spousal continuation law (215 ILCS 5/367.2)

If you lose a job or your hours are cut, Illinois continuation lets you keep an insured group plan for up to 12 months, at a premium no higher than the group rate, though it may leave out dental, vision or prescription drugs. A separate spousal law lets a divorced or widowed spouse keep coverage for up to 2 years, and a spouse who is 55 or older (including the spouse of a retiree) can keep it until becoming eligible for Medicare. Federal COBRA lasts 18 to 36 months but only applies to employers with 20 or more workers; if both apply, you are offered both and must choose one.

• Who it covers: The general state law applies to insured group health and HMO policies, including employers too small for federal COBRA (under 20 workers). You must have been on the group plan for 3 months in a row before losing coverage.
• How long: 12 months (state continuation); up to 2 years for a divorced or widowed spouse under 55; until Medicare eligibility for a qualifying spouse age 55 or older

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 Illinois, Get Covered Illinois is Illinois’s official, state-run health insurance marketplace. We’re an independent, licensed insurance agency, not part of Get Covered Illinois or any government agency, and we can help you compare Marketplace plans and enroll. Illinois left HealthCare.gov and became a full state-based Marketplace starting with 2026 coverage, so Illinois residents now apply and enroll through Get Covered Illinois instead of HealthCare.gov. Cigna and Molina are leaving the Illinois Marketplace after December 31, 2026, so their enrollees must pick a new plan 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 extra federal premium tax credits expired at the end of 2025 and were not renewed, so the 2026 plan year runs on the original ACA rules. That means the subsidy cliff is back: households above 400% of the poverty level generally get no premium tax credit, and Illinois rates rose an average of 28.8% for 2026.

If your income dropped

Illinois expanded Medicaid, so adults 19 to 64 with income up to about 138% of the federal poverty level can qualify even without children. You can apply any time of year, not just during open enrollment.

What coverage costs