COBRA Alternatives in Tennessee (2026)

Your options after leaving a job in Tennessee

If you lose a job in Tennessee and your employer has 20 or more workers, you can usually keep the same group plan through federal COBRA for up to 18 months. The catch is cost: you pay the full premium yourself, plus up to a 2% fee.

If your employer is smaller, Tennessee's own continuation law may apply instead. It lets you keep an insured group plan for the rest of the month your coverage ends plus 3 more months, if you were covered for at least 3 months and pay the premium in advance. It does not apply if the whole group plan ends or if you are eligible for Medicare.

Losing job-based coverage also opens a 60-day special enrollment period on HealthCare.gov. Because subsidies are based on your expected income for the year, a marketplace plan can cost far less than COBRA if your income has dropped.

TennCare is an option only if you fit a covered group, such as a parent of a minor child with income around the poverty level, a pregnant woman, or a person with a disability. Adults without children usually do not qualify, even with no income.

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.

Tennessee group continuation (Tenn. Code Ann. § 56-7-2312) and conversion (§ 56-7-2313)

If you work for a small employer with an insured group plan, Tennessee law lets you keep the same coverage for a short time after it ends, as long as you pay the full premium in advance. It is much shorter than federal COBRA, which usually runs 18 months but only applies to employers with 20 or more employees. Continuation does not apply if the whole group policy ends, if you are eligible for Medicare, or if you get similar group coverage within 31 days.

• Who it covers: Applies to insured group hospital, surgical and major medical policies regardless of employer size, which matters most for employees of small employers (under 20 workers) who are not covered by federal COBRA. You generally must have been covered under the group policy for at least 3 months before your coverage ended.
• How long: Rest of the month coverage ends plus 3 more months (longer for pregnancy, and up to 15 more months for a spouse or dependents after divorce or the employee's death)

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 Tennessee, HealthCare.gov is the federal government’s official marketplace for Tennessee. 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. Tennessee does not run its own exchange, so you apply through HealthCare.gov or a licensed agent. Tennessee has no state-funded premium help, and Cigna is leaving the Tennessee marketplace after 2026, so Cigna enrollees need to 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 enhanced federal premium tax credits expired on December 31, 2025. The House passed a three-year extension in January 2026, but it did not become law, 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 pay a larger share of income than they did in 2025.

If your income dropped

TennCare covers specific groups such as low-income children, pregnant women, people with disabilities, older adults and low-income parents of minor children (parents qualify up to about the poverty level since mid-2024). A working-age adult without dependent children who is not disabled generally cannot get TennCare at any income.

Because Tennessee has not expanded Medicaid, adults without kids who earn less than 100% of the federal poverty level fall into a gap: too poor for marketplace tax credits and not eligible for TennCare. KFF estimates about 89,000 Tennessee adults are in this gap, nearly all of them adults without dependent children.

What coverage costs