COBRA Alternatives in Texas (2026)

Your options after leaving a job in Texas

When you leave a job in Texas, you usually have three ways to keep coverage: federal COBRA, Texas state continuation, or a new marketplace plan. COBRA generally applies to employers with 20 or more workers and lets you keep the same plan, but you pay the full premium yourself.

Texas continuation fills gaps COBRA leaves. If your employer's plan was bought from an insurer or HMO and you were not eligible for COBRA, you may be able to stay on it for up to nine months. If you used COBRA, Texas adds six more months after it ends. It does not apply to self-funded employer plans, and it is usually not available if you were fired.

Losing job-based coverage also opens a special enrollment period on HealthCare.gov, typically 60 days. A marketplace plan with a tax credit is often cheaper than COBRA, especially if your income for the year will be lower than usual.

If your income has dropped sharply, check Medicaid, but know its limits here. Texas did not expand Medicaid, so most adults without children at home do not qualify at any income, and income below the poverty level also rules out marketplace tax credits.

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.

Texas state continuation (Texas Insurance Code ch. 1251, subch. G; ch. 1271 for HMOs)

Federal COBRA generally applies to employers with 20 or more employees. If your employer is too small for COBRA, Texas continuation can let you keep your group coverage for up to nine months; if you did have COBRA, Texas adds six months after it runs out (up to 24 months total for an employee). It usually is not available if you were fired, and it ends early if you become eligible for Medicare or get similar coverage elsewhere.

• Who it covers: Group health plans issued by insurance companies and HMOs regulated under the Texas Insurance Code. It does not apply to self-funded employer plans, and you generally must have been covered for the three months before your job ended.
• How long: 9 months if you are not eligible for COBRA; 6 more months after COBRA ends if you are

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 Texas, HealthCare.gov is the federal government’s official marketplace for Texas. 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. Texas does not run its own exchange, so Texans shop and apply for tax credits through HealthCare.gov. To have coverage start January 1, 2027, you need to pick a plan by December 15, 2026; a federal rule that would have ended open enrollment on December 31 was vacated by a court.

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 (enhanced) premium tax credits expired at the end of 2025 and were not renewed for 2026, so help returned to the pre-2021 rules. That means credits generally stop at 400% of the federal poverty level, and lower-income enrollees who used to pay nothing now pay part of the premium. The U.S. House passed a three-year extension in January 2026, but the Senate had not passed one as of fall 2026, so 2027 credits follow the same rules unless Congress acts.

If your income dropped

Texas has not expanded Medicaid. A working-age adult who is not disabled, not pregnant and not raising a minor child generally cannot get Texas Medicaid at any income. Parents qualify only at extremely low incomes (roughly 12% to 15% of the poverty level), and pregnant women qualify up to about 198% of the poverty level.

Because Texas did not expand Medicaid, adults with income below the federal poverty level can fall into a coverage gap: too poor for marketplace tax credits, but not eligible for Medicaid. KFF has estimated this gap at roughly 570,000 to 605,000 Texans, the largest of any state.

What coverage costs