The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) is a federal law that allows group health plan participants to continue their coverage after certain qualifying events (QEs) that would otherwise cause a loss of coverage. Individuals who continue coverage under COBRA are referred to as qualified beneficiaries (QBs).
COBRA applies to a wide range of group health plans, including major medical, dental, vision, health flexible spending accounts (health FSAs), and health reimbursement arrangements (HRAs). It may also apply to employee assistance programs (EAPs), telemedicine, and wellness plans if they provide medical care.
Qualifying events that may require an offer of COBRA include termination of employment, reduction of hours, death of the covered employee, divorce or legal separation, the employee's enrollment in Medicare, and a dependent losing eligibility under the plan. Depending on the QE, coverage may last up to 18 or 36 months, with possible extensions for disability or a second qualifying event.
If a qualified beneficiary elects COBRA, the plan may charge the full premium plus an administrative fee. For example, 102% of the applicable premium, generally the full cost of the insurance premium paid to the carrier.
COBRA applies to employers with 20 or more employees on a typical business day during the previous calendar year. Church plans and governmental entities are exempt from federal COBRA. Many states, however, require smaller employers to offer similar continuation coverage under their own “mini-COBRA” laws, covered later in this guide.
Employers and plan administrators must meet several notice deadlines throughout the COBRA process. Missing these deadlines can expose an employer to significant penalties.
Deadline: Within 90 days of the coverage start date.
Informs employees and dependents of their rights to continuation coverage, notification requirements, and election rules.
Triggers: Death, termination, reduced hours, Medicare entitlement, and other qualifying events.
The employer must notify the plan administrator within 30 days of the qualifying event.
Deadline: 14 days after the administrator is notified, or 44 days after the qualifying event if the employer also serves as the administrator.
The election notice must include coverage details, eligibility, cost, deadlines, and the consequences of not electing coverage.
Non-compliance penalty: $100 or more per day, per affected person. CoAd's COBRA administration service supports employers in preventing missed deadlines and the penalties that come with them.
Employers with fewer than 20 employees are not subject to federal COBRA, but many states require small employers to offer their own continuation coverage for insured group health plans, commonly known as “mini-COBRA” or state continuation.
The information below summarizes state continuation requirements currently administered by CoAd in 19 states. It is intended as general information only and is not an exhaustive statement of each state's requirements. For questions specific to your business, contact CoAd or an employment attorney.
Who is subject? Applies to all Arizona small employers (at least one, and not more than 20, eligible employees during the previous calendar year).
Who is eligible for continuation coverage? Employees, spouses, and dependents covered under the employer's group health plan for at least three consecutive months before the qualifying event (QE).
What benefits are subject to continuation? Fully insured group health plans. Guidance has not been issued specifying which plans apply, but likely includes fully insured medical, dental, and vision. Self-insured plans (including health FSAs and HRAs) are not subject.
What is the maximum coverage period? 18 months for all QEs, which may be extended for a second QE or a disability determination.
What is the maximum premium that can be charged? 105% of the applicable premium (150% during a disability extension).
Who is subject? Applies to all employers with insurance policies in the state, regardless of size.
Who is eligible for continuation coverage? Covered employees, their spouses, and dependents who were covered on the day before the QE.
What benefits are subject to continuation? Fully insured group medical, surgical, and hospitalization plans. Standalone dental and vision policies are not covered.
What is the maximum coverage period? 36 months for all QEs listed under federal COBRA. For employers subject to federal COBRA, an additional 18 months applies after federal COBRA is exhausted (termination or reduction of hours), for a total of 36 months.
What is the maximum premium that can be charged? 110% of the applicable premium (150% during a disability extension).
Who is subject? Applies to all employers exempt from federal COBRA.
Who is eligible for continuation coverage? Employees, spouse, and dependents covered continuously under the plan for at least six months prior to the loss of coverage.
What benefits are subject to continuation? Fully insured medical group health plans only. Standalone dental and vision policies are not covered.
What is the maximum coverage period? 18 months following termination of employment, death of the covered employee, or divorce/legal separation.
What is the maximum premium that can be charged? 100% of the applicable premium. No administration fee.
Who is subject? All Connecticut employers, including private, public, non-profit, church plans, and governmental entities. Applies to small employers (guaranteeing coverage) and to employers subject to federal COBRA (extending the coverage period for certain QEs).
Who is eligible for continuation coverage? Employees covered under the plan immediately before the QE, plus covered spouses and dependent children.
What benefits are subject to continuation? Fully insured group medical and hospitalization plans only. Does not apply to standalone dental, vision, or prescription policies.
What is the maximum coverage period? Up to 30 months for termination of employment, reduction of hours, or leave of absence (beginning after 18 months of federal COBRA is exhausted, where applicable). 36 months applies for death, divorce/legal separation, Medicare entitlement, or a dependent losing eligibility. The 30-month period may extend to 36 months on a second QE.
What is the maximum premium that can be charged? 102% of the applicable premium.
Who is subject? Applies to all D.C. small employers (at least one, and not more than 20, eligible employees during the previous calendar year).
Who is eligible for continuation coverage? Employees covered under the plan at the time of the QE, plus covered spouse and dependent children.
What benefits are subject to continuation? Medical group health plans only. Does not apply to standalone dental, vision, accident-only, hospital indemnity, or specified disease policies.
What is the maximum coverage period? 3 months for all QEs.
What is the maximum premium that can be charged? 102% of the applicable premium.
Who is subject? Applies to employers with insurance policies in the state who are not subject to federal COBRA.
Who is eligible for continuation coverage? Employees, covered spouse, and dependents covered immediately before the QE.
What benefits are subject to continuation? Hospital/medical policies or certificates, hospital or medical service plan contracts, and HMO subscriber contracts. Does not apply to accident-only, specified disease, individual hospital indemnity, credit, dental-only, vision-only, Medicare supplement, long-term care, or disability income insurance.
What is the maximum coverage period? 18 months for all QEs listed under federal COBRA, with a disability extension of up to 29 months total.
What is the maximum premium that can be charged? 115% of the applicable premium (150% during a disability extension).
Who is subject? Applies to all employers with insurance policies in the state.
Who is eligible for continuation coverage? Covered employees, spouse, and dependents covered for three months prior to termination or reduction in hours. Spouses/dependents covered immediately before the QE are also eligible following death, divorce, retirement, or a dependent aging off coverage.
What benefits are subject to continuation? Fully insured hospital, surgical, major medical, PPO, or HMO plans. Separate dental, vision, prescription drug, disability, and specified disease benefits are not covered.
What is the maximum coverage period? 12 months for termination or reduction of hours. 24 months for dependents aging out or death of the employee. For spouses following divorce or death, 2 years if under 55 at the QE, or until Medicare-eligible if 55 or older; the same Medicare-eligible extension applies on retirement of the employee.
What is the maximum premium that can be charged? 100% of the applicable premium. A 20% administration fee may be added for spouses over 55 after the initial 2 years.
Who is subject? Applies to all employers with insurance policies in the state.
Who is eligible for continuation coverage? Depends on the QE. Termination requires the covered employee be a Maryland resident with at least 3 months of coverage; spouse/dependents must be covered the day immediately prior to the QE. Death and divorce each require at least 30 days of prior coverage for the spouse and Maryland residency/coverage for the employee.
What benefits are subject to continuation? Fully insured hospitalization, surgical, and medical group health plans only.
What is the maximum coverage period? Generally 18 months for termination, divorce/legal separation, or death. For dependent children, coverage on death or divorce ends when it would have ended absent the QE. For spouses, divorce-based coverage ends upon other group coverage, non-group coverage, or remarriage.
What is the maximum premium that can be charged? 100% of the applicable premium for divorce; 102% for other QEs.
Who is subject? Applies to all Massachusetts small employers (at least one, and not more than 19, eligible employees during the previous calendar year).
Who is eligible for continuation coverage? Covered employees, spouse, and dependents covered on the day before the QE.
What benefits are subject to continuation? Fully insured major medical plans. Standalone dental and vision plans are not covered.
What is the maximum coverage period? 18 months for termination or reduction of hours. 36 months for death, divorce/legal separation, Medicare entitlement, or a dependent losing eligibility.
What is the maximum premium that can be charged? 102% of the applicable premium (150% during a disability extension).
Who is subject? Applies to all employers with insurance policies in the state, and to self-insured plans offered by local government units.
Who is eligible for continuation coverage? Covered employees, spouse, and dependents covered on the day before the QE.
What benefits are subject to continuation? Fully insured plans with two or more employees, and self-insured plans offered by local government units. Does not apply to self-insured non-governmental employers. (A separate life insurance continuation requirement also exists but is not covered here.)
What is the maximum coverage period? Generally 18 months for termination or reduction of hours, unless the QB obtains other group coverage sooner. For death or divorce, coverage may continue until other group coverage begins or the date coverage would have otherwise ended. For Medicare entitlement or a dependent aging out, coverage continues until the earliest of the plan's normal end date, 36 months after election, or enrollment in another group plan.
What is the maximum premium that can be charged? 102% of the applicable premium.
Who is subject? Applies to small employers not covered by federal COBRA.
Who is eligible for continuation coverage? Employees covered under the plan before the QE, plus covered spouses and dependent children.
What benefits are subject to continuation? Fully insured hospitalization, surgical, and medical group health plans only. Does not apply to standalone dental, vision, specified disease, or accident-only plans.
What is the maximum coverage period? 18 months for termination or reduction of hours, or 36 months for other QEs listed under federal COBRA. (Separate rules extend coverage further for spouses 55 or older.)
What is the maximum premium that can be charged? 102% of the applicable premium during the period paralleling federal COBRA; 125% during the extension for spouses 55 or older.
Who is subject? Applies to small employers (2 to 50 eligible employees) not subject to federal COBRA, including those under 20 employees or exempt plans such as church plans and governmental entities.
Who is eligible for continuation coverage? Employees covered immediately before the QE, plus covered spouse and dependent children.
What benefits are subject to continuation? Fully insured group medical and hospitalization plans only. Standalone dental or vision plans are not guaranteed continuation.
What is the maximum coverage period? Mirrors federal COBRA: 18 months for termination, reduction of hours, or leave of absence; 36 months for death, divorce/legal separation, or a dependent losing eligibility. A disability extension may apply for those originally entitled to 18 months.
What is the maximum premium that can be charged? 102% of the applicable premium (150% during a disability extension).
Who is subject? Applies to all employers with insurance policies in the state, including private, public, non-profit, church plans, and governmental entities, even those already subject to federal COBRA, who may need to provide extended coverage beyond COBRA's requirements.
Who is eligible for continuation coverage? Employees covered immediately before the QE, plus covered spouse and dependent children.
What benefits are subject to continuation? Fully insured group medical, surgical, and hospitalization plans only. Does not apply to standalone dental, vision, or prescription plans.
What is the maximum coverage period? 36 months for any QE listed under federal COBRA. For employers not subject to federal COBRA, 36 months applies directly. For employers subject to federal COBRA, coverage extends from 18 months (or 29 with a disability extension) to a total of 36 months. Does not apply where federal COBRA already guarantees 36 months.
What is the maximum premium that can be charged? 102% of the applicable premium (150% during a disability extension).
Who is subject? Applies to all employers not covered by federal COBRA.
Who is eligible for continuation coverage? Employees covered continuously for at least three months prior to the QE, plus spouses and dependents covered immediately before the QE.
What benefits are subject to continuation? Fully insured hospitalization, surgical, and medical group health plans only. Does not apply to standalone dental, vision, specified disease, or accident-only plans.
What is the maximum coverage period? 12 months for termination of employment, death of the covered employee, or divorce.
What is the maximum premium that can be charged? 100% of the applicable premium. No administration fee.
Who is subject? Applies to all small employers (2 to 19 employees), including non-profits, church plans, and governmental entities.
Who is eligible for continuation coverage? Employees covered for at least three consecutive months before the QE, plus covered spouse and dependent children.
What benefits are subject to continuation? Fully insured hospital, surgical, and major medical benefits. Does not apply to standalone dental or vision plans.
What is the maximum coverage period? 9 months for all QEs listed under federal COBRA.
What is the maximum premium that can be charged? 105% of the applicable premium.
Who is subject? Applies to all employers with insurance policies in the state.
Who is eligible for continuation coverage? Employees, spouse, and dependents covered continuously for at least three months prior to the QE.
What benefits are subject to continuation? Fully insured hospitalization, surgical, and medical group health plans only.
What is the maximum coverage period? Through the end of the month of the QE plus three additional months for termination of employment; through the end of the month of the QE plus 15 additional months for divorce or death of the covered employee.
What is the maximum premium that can be charged? 100% of the applicable premium. No administration fee.
Who is subject? Applies to all employers with insurance policies in the state, including those already subject to federal COBRA, who may need to provide extended coverage beyond COBRA's requirements.
Who is eligible for continuation coverage? Employees covered for at least three months before the QE, plus covered spouse and dependent children.
What benefits are subject to continuation? Fully insured hospitalization, surgical, and major medical group health plans only. Does not apply to standalone dental, vision, or prescription plans.
What is the maximum coverage period? 9 months for all QEs for small or exempt employers not subject to federal COBRA. For employers subject to federal COBRA, an additional 6 months after federal COBRA is exhausted (up to 42 months total).
What is the maximum premium that can be charged? 102% of the applicable premium.
Who is subject? Applies to all employers with insurance policies in the state, except those subject to federal COBRA.
Who is eligible for continuation coverage? Employees, spouses, and dependents covered continuously for at least three months before the QE.
What benefits are subject to continuation? Fully insured hospitalization, surgical, and medical group health plans.
What is the maximum coverage period? 12 months for all QEs listed under federal COBRA.
What is the maximum premium that can be charged? 102% of the applicable premium.
Who is subject? Applies to all employers with insurance policies in the state.
Who is eligible for continuation coverage? Employees, spouses, and dependents covered continuously for at least three months before the QE.
What benefits are subject to continuation? Fully insured hospitalization and medical group health plans only. Does not apply to specified disease or accident-only plans.
What is the maximum coverage period? Generally 18 months for all QEs listed under federal COBRA, though coverage may last indefinitely; insurers may require conversion to an individual policy after 18 months.
What is the maximum premium that can be charged? 100% of the applicable premium. No administration fee.
The American Rescue Plan Act of 2021 (ARPA) provided a temporary, fully government-funded subsidy that covered 100% of the COBRA premium (and comparable state mini-COBRA premiums) for eligible individuals during a limited window: April 1, 2021 through September 30, 2021. This subsidy has expired and does not apply to current COBRA elections.
The subsidy was available to “Assistance Eligible Individuals” (AEIs) — qualified beneficiaries who elected continuation coverage due to an involuntary termination of employment or a reduction in hours. Employers and other “premium payees” who fronted the cost of coverage during this period claimed a corresponding refundable tax credit, generally applied against payroll taxes and reported on Form 941.
Employers who claimed the credit were required to retain a self-certification or attestation from each individual receiving premium assistance, or other documentation substantiating eligibility. The IRS provided detailed guidance on the credit, eligibility, and recordkeeping requirements in IRS Notice 2021-31.
Although the subsidy period has long since ended, employers may still face retroactive questions or audit exposure tied to how the 2021 window was administered. If your business has legacy questions about credits claimed or recordkeeping from this period, contact CoAd or your tax advisor.
COBRA compliance is complex, and the rules only get more layered once state mini-COBRA requirements are added on top of federal law. CoAd handles COBRA administration end-to-end so employers can stay compliant without the manual work.
Non-compliance penalties and excise taxes can run $100 or more per day, per violation. Partnering with CoAd helps employers avoid that exposure while staying focused on their business.
The U.S. Department of Labor (DOL) provides two helpful resources for employers:
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