H1B Layoff Health Insurance: Options in the Grace Period

If you are laid off on an H-1B, your status can continue for up to 60 days, but your health insurance usually ends on your last day or at the end of that month. You have three main ways to stay covered: elect COBRA to keep your employer's plan, which you can do up to 60 days after losing coverage and which then applies retroactively; enroll in a Marketplace plan through a 60 day special enrollment period, since H-1B holders count as lawfully present; or, for family members who qualify, use a short travel medical plan as a bridge. The right choice depends mostly on how long you expect the gap to last. For relatives newly arrived in the US, you can also compare new immigrant insurance plans on Ombrela.

Key facts at a glance

• Under 8 CFR 214.1(l)(2), H-1B workers and their dependents do not lose status solely because employment ended, for up to 60 consecutive days or until the end of their authorized validity period, whichever is shorter.
• The grace period is available once per authorized validity period, DHS may shorten or eliminate it, and you may not work during it without separate authorization.
• COBRA lets you keep your employer's plan for up to 18 months after a job loss, at up to 102% of the plan's full cost.
• You have at least 60 days to elect COBRA, and once you elect and pay, coverage is retroactive to the day your job based plan ended.
• Losing job based coverage opens a Marketplace special enrollment period running 60 days before and 60 days after the loss.
• HealthCare.gov treats people with valid nonimmigrant visas, including H-1B and H-4 holders, as lawfully present and able to buy Marketplace coverage.
• From January 1, 2027, federal law limits premium tax credits for non citizens to green card holders, certain Cuban and Haitian entrants and COFA migrants.

What happens if you get laid off on H1B?

Federal regulations give you a cushion. Under 8 CFR 214.1(l)(2), a worker in H-1B status, along with H-4 dependents, is not considered to have failed to maintain status solely because the job ended, for up to 60 consecutive days or until the end of the authorized validity period on the I-94, whichever is shorter. It is available once per validity period, and DHS may shorten or eliminate it at its discretion. You cannot work during it unless you have other authorization. Many immigration attorneys caution that severance pay does not extend it; the clock generally runs from your last day of employment.

According to USCIS, during the grace period an eligible worker may be the beneficiary of a new employer's nonfrivolous H-1B petition, and under H-1B portability may start working for the new employer as soon as the petition is properly filed. Other options include applying to change to another status, such as H-4, F-1 or B-2, applying for a compelling circumstances employment authorization document if eligible, or leaving the US. If one of these filings happens within the grace period, your authorized stay can run beyond 60 days while it is pending.

H-1B rules and fees have changed repeatedly during 2025 and 2026, so get individual advice before you travel or let the grace period run out. This article is general information, not legal advice; consult an immigration attorney about your own case.

When does employer health insurance end after a layoff?

Your plan documents decide. Some plans end coverage on your last day of work, many at the end of that month, and a few later if severance keeps you on payroll. Your HR department or benefits portal will show the exact date, and your COBRA election notice will confirm it. Ask for the date in writing on your last day.

Before that date, use what you have. Refill prescriptions, book any urgent visits and ask your doctor for records you may need later. Flexible spending account balances usually must be spent on care received while you are still covered. If you are mid treatment, note which providers and prescriptions you rely on, because that will shape your choice between COBRA and a new plan.

Can H1B workers get COBRA, and how much does it cost?

Yes. COBRA eligibility depends on your employer's plan and the reason your coverage ended, not on your citizenship or visa. The federal law applies to group health plans of employers with 20 or more employees, and the Department of Labor notes that many states have "mini COBRA" laws that can reach smaller insured employers. COBRA gives you the same plan you had, with the same doctors, network and deductible progress, for up to 18 months after a job loss. Each person on the plan, including your spouse and children, has an independent right to elect it.

The catch is price. You usually pay the whole premium, meaning your old share plus your employer's share, plus a 2% administrative fee, up to 102% of the plan's cost. KFF's 2025 Employer Health Benefits Survey put average annual premiums at $9,325 for single coverage and $26,993 for family coverage. At 102%, that works out to roughly $790 a month for one person and about $2,290 a month for a family. Your own plan's figure appears in your election notice. Some employers subsidize COBRA as part of severance, so check your separation agreement.

How does COBRA's 60 day election window work?

The Department of Labor explains that you have 60 days to elect COBRA, counted from the later of the day your coverage ends or the day your election notice is provided. After you elect, you have 45 days to make the first payment. Because COBRA is retroactive to the day you lost your job based plan, that first payment may cover more than one month.

This gives an H-1B worker in a short job search a legitimate choice. If you find a new employer quickly and its plan starts inside the window, you may never need to elect COBRA. If something happens in the meantime, such as an accident or a hospital stay, you can still elect within the window, pay the premiums back to the loss date, and have the claims processed under your old plan. Two cautions apply. Providers may ask for payment or see your coverage as inactive until you elect, and missing the deadline ends the option for good. Put the election deadline in your calendar the day the notice arrives.

Can H1B holders buy ACA Marketplace insurance after a layoff?

Yes. HealthCare.gov lists people with valid nonimmigrant visas among those who are lawfully present, which covers H-1B workers and H-4 dependents while their status continues. Losing job based coverage is a qualifying life event, and the Department of Labor's COBRA guide explains that you must pick a Marketplace plan within 60 days before or after losing that coverage. Coverage usually starts on the first day of the month after you choose a plan. Being offered COBRA does not make you ineligible for the Marketplace.

Subsidies are where 2026 and 2027 differ. In 2026 you may qualify for a premium tax credit if your expected household income for the year is between 100% and 400% of the federal poverty level; a mid year layoff can lower your annual income, so estimate it carefully. Starting January 1, 2027, H.R. 1 (Public Law 119-21) limits premium tax credits for non citizens to green card holders, certain Cuban and Haitian entrants and COFA migrants. H-1B and H-4 holders could still buy a Marketplace plan for 2027, but at full price. One more rule: if you elect COBRA and later drop it voluntarily, that does not open a new special enrollment period, so you would wait for open enrollment.

Can a new immigrant or short term plan bridge the gap?

Be careful here, because eligibility is the issue. The travel medical plans Ombrela sells, including the plans in our new immigrant quote, are written for people whose residence is outside the US. IMG's Patriot America Plus certificate, for example, makes a person ineligible once they have established habitual residency in the destination country, which it ties to where you live and where you pay income tax on employment. According to plan details from our quote engine, Trawick's Safe Travels USA plans are for non US residents and must be bought within 364 days of arrival. A worker who has lived and paid US tax on an H-1B salary for years will usually not qualify, and a policy bought by someone who does not meet the eligibility rules can be void.

Where these plans do help is with family members who have not settled in the US, such as parents visiting to support you or a relative who has just arrived. They cover sudden illness and injury, exclude pre-existing conditions apart from limited acute onset benefits on some plans, and are not ACA compliant. Short term health plans sold in the US by other companies are regulated by the states, often exclude pre-existing conditions, and are limited in length by federal and state rules; Ombrela does not sell them. Our guide to short term vs travel medical insurance explains the difference, and you can check new immigrant plan eligibility for a relative on Ombrela.

How should I cover my H-4 spouse and children?

The grace period covers H-4 dependents too, so their status generally tracks yours. For insurance, each family member who was on your employer plan is a qualified beneficiary with a separate COBRA election right. You could elect COBRA only for a child in treatment, for example, and move the rest of the family to a Marketplace plan.

If your spouse works on an H-4 EAD and has an employer plan, your job loss is usually a special enrollment event for that plan. The Department of Labor's guide says group plans generally require you to request special enrollment within 30 days of losing other coverage, a shorter window than COBRA or the Marketplace, so act on it first. A Marketplace application covers the whole household in one plan, and in 2026 subsidies depend on the household's combined income. Our guide to health insurance for H-1B visa holders covers the family choices in more depth.

Which option fits a short gap versus a long one?

• New job likely within a few weeks. Consider holding COBRA as a retroactive safety net and electing only if you need care before the new plan starts, keeping the deadline in mind.
• Gap of one to three months. Compare the COBRA premium with a Marketplace plan starting next month. COBRA keeps your doctors and deductible progress; the Marketplace is often cheaper, especially with a 2026 tax credit.
• Ongoing treatment, pregnancy or a planned procedure. COBRA is usually the most reliable choice, because travel medical plans exclude pre-existing conditions and switching plans mid treatment can reset deductibles and networks.
• Leaving the US within the grace period. COBRA or a one month Marketplace plan can cover you until departure. Once you are home, your home country system or a plan for your destination takes over.
• Long or uncertain gap. A Marketplace plan is usually the more sustainable choice for 2026, but remember that premium tax credits end for H-1B and H-4 holders from 2027.

Whatever you choose, avoid a day with no coverage for anyone in the family. A single emergency room visit in the US can cost more than several months of premiums.

Frequently Asked Questions

Does the H-1B grace period start on my last day of work or my last paycheck?

The regulation measures the grace period from the end of the employment your status was based on, and many immigration attorneys caution that severance pay does not extend it. It lasts up to 60 consecutive days or until your I-94 expires, whichever is shorter. Because the date matters, confirm it with an immigration attorney using your termination letter.

Can I get COBRA if I am on an H-1B visa?

Yes. COBRA depends on your employer's plan and the reason coverage ended, not on citizenship. If your employer had 20 or more employees and you were on its group health plan, you can generally elect COBRA for up to 18 months after a layoff. You pay up to 102% of the plan's full cost, and you have at least 60 days to decide.

Does COBRA extend my H-1B grace period?

No. Health coverage has no effect on immigration status. COBRA keeps your insurance, but your H-1B grace period still ends after up to 60 days or when your I-94 expires, whichever comes first, unless you take an action such as a new employer petition or a change of status application. Plan your insurance and your status separately.

Can H-1B and H-4 holders get subsidies on HealthCare.gov?

In 2026, yes, if expected household income is between 100% and 400% of the federal poverty level and other rules are met. From January 1, 2027, H.R. 1 limits premium tax credits for non citizens to green card holders, certain Cuban and Haitian entrants and COFA migrants, so H-1B and H-4 holders could still enroll but would pay full price.

Can I buy visitor or new immigrant insurance after an H-1B layoff?

Usually not for yourself if you have lived and worked in the US for some time. These plans are for people whose residence is outside the US, and IMG's Patriot America Plus certificate excludes anyone who has established habitual residency in the destination country. They can suit parents or relatives who have just arrived. Check eligibility before buying, because an ineligible policy can be void.