Benefits

COBRA Insurance: Eligibility, Cost, Duration, and Alternatives

The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires certain employers to offer temporary continuation of group health coverage after a qualifying event such as job loss, reduction in hours, or other life changes. The U.S. Department of Labor and the Employee Benefits Security Administration (EBSA) administer COBRA provisions for private-sector group health plans.

COBRA does not provide free or subsidized coverage. Individuals who elect COBRA pay up to 102% of the full premium cost — the employee share plus the employer share, plus a 2% administrative fee. This page compiles the eligibility rules, coverage duration, cost structure, qualifying events, election deadlines, and alternatives established under federal law.

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Which Employers Are Required to Offer COBRA

COBRA applies to private-sector group health plans maintained by employers that had at least 20 employees on more than 50 percent of typical business days in the previous calendar year. Both full-time and part-time employees are counted when determining whether a plan is subject to COBRA — each part-time employee counts as a fraction of a full-time employee based on hours worked.

COBRA also applies to plans sponsored by state and local governments. The law does not apply to plans sponsored by the federal government or by churches and certain church-related organizations, according to the DOL’s COBRA fact sheet.

Employers with fewer than 20 employees are not subject to federal COBRA. However, many states have enacted “mini-COBRA” laws that extend similar continuation coverage rights to employees of smaller employers. The duration and terms of state mini-COBRA laws vary — some states provide coverage for up to 36 months.

Qualifying Events That Trigger COBRA Eligibility

Under COBRA continuation coverage provisions, specific events trigger the right to elect continuation coverage. The qualifying events differ depending on whether the beneficiary is the employee, spouse, or dependent child.

Qualifying events for employees: Voluntary or involuntary termination of employment (for reasons other than gross misconduct), and reduction in the number of hours of employment.

Qualifying events for spouses and dependent children (in addition to the above): Death of the covered employee, the covered employee becoming entitled to Medicare, divorce or legal separation from the covered employee, and a dependent child losing eligibility under the plan rules (such as aging out of coverage).

The DOL’s Employee Guide to COBRA specifies that termination for “gross misconduct” disqualifies the employee from COBRA eligibility. However, the law does not define gross misconduct — this determination is made on a case-by-case basis by courts.

How Long COBRA Coverage Lasts

The maximum duration of COBRA continuation coverage depends on the qualifying event:

18 months for termination of employment (voluntary or involuntary, other than for gross misconduct) and for reduction in hours of employment.

29 months for individuals who are determined to be disabled by the Social Security Administration at the time of the qualifying event or within the first 60 days of COBRA coverage. The 11-month extension applies to all qualified beneficiaries in the family, not just the disabled individual. The premium for months 19 through 29 may increase to up to 150% of the plan cost.

36 months for all other qualifying events — death of the covered employee, the employee becoming entitled to Medicare, divorce or legal separation, and loss of dependent child status.

If a second qualifying event occurs during the initial 18-month period (such as the death of the former employee or a divorce), the maximum coverage period may be extended to 36 months from the date of the original qualifying event.

How Much COBRA Costs

Under DOL COBRA regulations, employers may charge qualified beneficiaries up to 102% of the full cost of the plan for continuation coverage. The 102% includes the total premium (both the portion the employer previously paid and the employee’s share) plus a 2% administrative fee.

For individuals who qualify for the disability extension (months 19–29), employers may charge up to 150% of the plan cost.

To estimate a COBRA premium, the DOL’s consumer FAQ suggests employees review their pay stubs for their premium contribution, then add the employer’s contribution. The employer’s total cost is reported in Box 12, Code DD of the employee’s W-2 form.

COBRA premiums can change if the employer renegotiates plan terms during the coverage period. Qualified beneficiaries receive the same coverage as similarly situated active employees and are subject to the same plan modifications.

Election Period and Payment Deadlines

The DOL’s COBRA guide establishes specific deadlines for electing and paying for COBRA coverage:

Election period: Qualified beneficiaries must be given at least 60 days from the date of the COBRA election notice (or the date coverage would otherwise end, whichever is later) to elect continuation coverage.

Initial premium payment: The first premium payment must be made within 45 days after electing COBRA coverage. This payment is retroactive — coverage is effective from the date of the qualifying event, not from the date of election.

Subsequent payments: Monthly premium payments are due on the first day of each coverage period. A 30-day grace period applies to each subsequent payment. Failure to make a timely payment may result in loss of coverage.

COBRA coverage is retroactive once elected, meaning any medical claims incurred between the qualifying event and the election date are covered.

Notification Requirements

COBRA imposes notification obligations on both employers and employees:

Employer to plan administrator: The employer must notify the plan administrator within 30 days of a qualifying event involving termination of employment, reduction in hours, the employee’s death, or the employee’s entitlement to Medicare.

Employee/beneficiary to plan administrator: The qualified beneficiary must notify the plan administrator within 60 days of a divorce, legal separation, or a child’s loss of dependent status. The plan’s Summary Plan Description (SPD) must explain the procedures for providing this notice.

Plan administrator to qualified beneficiaries: Upon receiving notice of a qualifying event, the plan administrator must provide an election notice to qualified beneficiaries within 14 days. This notice must describe COBRA rights and how to elect coverage.

When COBRA Coverage Ends Early

COBRA continuation coverage terminates before the maximum period expires under the following circumstances, as specified in the DOL COBRA fact sheet: the employer ceases to maintain any group health plan, the qualified beneficiary fails to make a timely premium payment, the qualified beneficiary becomes covered under another group health plan (unless that plan contains an exclusion or limitation for a preexisting condition), the qualified beneficiary becomes entitled to Medicare, or the qualified beneficiary engaged in conduct that would justify the plan in terminating coverage of a similarly situated active employee (such as fraud).

COBRA vs. Health Insurance Marketplace

Losing employer-sponsored health coverage is a qualifying life event that triggers a Special Enrollment Period on the Health Insurance Marketplace (HealthCare.gov). The DOL’s Employee Guide to COBRA states that being offered COBRA continuation coverage does not make an individual ineligible for Marketplace coverage or for premium tax credits.

Key differences between COBRA and Marketplace coverage:

Cost: COBRA requires payment of the full premium (up to 102%), with no government subsidy. Marketplace plans may qualify for premium tax credits based on household income, which can significantly reduce monthly costs. The DOL recommends that individuals consider all options — including Marketplace coverage, Medicaid, Medicare, and spousal plan enrollment — before electing COBRA.

Provider network: COBRA maintains the same plan, network, and benefits the employee had during active employment. Marketplace plans may have different provider networks and benefit structures.

Duration: COBRA is limited to 18 or 36 months depending on the qualifying event. Marketplace coverage can be renewed annually with no maximum duration.

Enrollment window: Both COBRA and the Marketplace require action within 60 days of losing coverage. To enroll in a Marketplace plan, individuals can apply at HealthCare.gov or call 1-800-318-2596.

Other coverage options include Medicaid (available year-round to those who qualify based on income), Medicare (for individuals aged 65+ or with qualifying disabilities), and enrollment in a spouse’s or domestic partner’s employer plan through a special enrollment period.

State Mini-COBRA Laws

States with mini-COBRA laws extend continuation coverage rights to employees of employers that are too small to be covered by federal COBRA (generally those with fewer than 20 employees). Coverage periods under state mini-COBRA laws range from 3 to 36 months depending on the state. California’s Cal-COBRA provides up to 36 months of continuation coverage, while New York’s mini-COBRA provides up to 36 months as well.

State mini-COBRA eligibility requirements, covered qualifying events, and premium rules vary. Contact the state insurance department or the state labor department for details. See Employment Law by State for state-specific resources.

Frequently Asked Questions

Can I get COBRA if I quit my job?

Yes. COBRA eligibility applies to both voluntary and involuntary termination of employment, as long as the termination is not due to gross misconduct. The DOL’s COBRA provisions do not distinguish between quitting and being laid off for purposes of continuation coverage eligibility.

How much does COBRA insurance cost per month?

COBRA premiums equal 102% of the total plan cost (the full employer and employee premium, plus a 2% administrative fee). The actual dollar amount depends on the specific employer plan. The DOL consumer FAQ recommends checking pay stubs and the W-2 Box 12 Code DD to estimate the full cost.

How long does COBRA coverage last?

18 months for job loss or reduction in hours. Up to 29 months if the individual qualifies for the Social Security disability extension. Up to 36 months for qualifying events involving death, divorce, Medicare entitlement, or loss of dependent status.

Can I switch from COBRA to a Marketplace plan?

Yes. Individuals can enroll in a Marketplace plan during Open Enrollment or during a Special Enrollment Period triggered by the exhaustion of COBRA coverage. Electing COBRA does not prevent future Marketplace enrollment. However, voluntarily dropping COBRA early does not typically trigger a Special Enrollment Period.

Does COBRA cover dental and vision?

If the employer’s group health plan includes dental and vision coverage, COBRA continuation coverage includes those benefits. COBRA requires that the coverage offered to qualified beneficiaries be identical to the coverage available to similarly situated active employees under the same plan.

What happens if I miss a COBRA payment?

COBRA provides a 30-day grace period for each monthly premium payment after the initial payment. If payment is not made within the grace period, the plan may terminate continuation coverage retroactively to the last day for which a timely payment was made. The plan is not required to send monthly premium notices.

Sources

Update History

March 2026: Initial publication. Compiled from DOL, EBSA, HealthCare.gov, and state insurance department sources. All URLs verified functional.

This page compiles information from official government sources for general reference purposes. It does not constitute legal advice. Employment law is subject to legislative changes and judicial interpretation. For specific compliance questions, consultation with a licensed attorney. Last updated: March 2026.