COBRA Continuation Coverage After Employment Ends

COBRA lets an employee, spouse or dependent child keep the employer's group health plan for a limited period after an event that would otherwise end coverage. The plan does not change; the cost does, because the person now pays the whole premium plus an administrative charge instead of the employer's share. The right belongs to group health plans of employers with 20 or more employees. The election window is 60 days, and it is unforgiving.

Which plans, and which people

COBRA reaches group health plans maintained by private employers with at least 20 employees on more than half of the typical business days in the previous calendar year, counting part-time employees as fractions. State and local government plans are covered through a parallel federal provision. Church plans and the federal government's own program sit outside COBRA and are handled under separate rules.

The people with rights are called qualified beneficiaries: the covered employee, the covered spouse, and covered dependent children, including a child born to or placed for adoption with the covered employee during the continuation period. Each qualified beneficiary has an independent election right. A spouse can elect COBRA even if the employee declines, and a parent may elect on behalf of a minor child.

Note: COBRA covers health plans — medical, dental, vision, prescription drug, health flexible spending arrangements and certain employee assistance programs. It does not extend life insurance or disability coverage.

Qualifying events set the length

How long coverage may run depends entirely on which event caused the loss.

Two extensions can stretch an 18-month period. If the Social Security Administration determines that a qualified beneficiary was disabled at some point during the first 60 days of continuation coverage, the period can extend by 11 additional months for the whole family unit — and the plan may charge a higher percentage of the premium for those extra months. A second qualifying event during the initial 18 months, such as a divorce, can extend the family's coverage to 36 months measured from the first event.

Termination for gross misconduct is the one carve-out that removes the right entirely. The term is not defined by statute, employers use it rarely, and disputes over it are resolved case by case. If an employer denies COBRA on this basis, ask for the reason in writing.

The notice and payment clocks

1. Within 90 days of coverage starting

   The plan sends a general notice describing COBRA rights. Keep it — it names the plan administrator you will need to contact later.

2. Within 30 days of the event

   The employer notifies the plan administrator of a termination, hours reduction, death or Medicare entitlement.

3. Within 60 days of the event

   For a divorce, legal separation or a child losing dependent status, the beneficiary must notify the plan. Missing this deadline is the most common way a spouse loses the right.

4. Within 14 days

   The plan administrator sends the election notice after being notified. The window is longer where the employer is also the administrator.

5. 60 days to elect

   Measured from the later of the date coverage is lost or the date the election notice is provided.

6. 45 days to pay

   After electing, the first payment is due within 45 days and must cover the period back to the date coverage was lost.

7. 30-day grace period

   Each later monthly payment carries a grace period. Non-payment after it ends terminates coverage without further notice.

Coverage elected on the last available day is retroactive to the date of the gap, so care received in the interval is covered once the first payment clears. That is why some people wait — they hold the election open while healthy and elect if a claim arises. It works, but only if the paperwork and the payment both land inside the windows. The Department of Labor's COBRA page is the authoritative description of these deadlines.

Watch out: COBRA is elected in writing to the plan administrator, not to a former manager. Telling HR by phone that you "want to keep insurance" does not elect coverage.

Cost, and the ways coverage ends early

The plan may charge the full cost of coverage — the employee and employer shares combined — plus a small administrative percentage set by statute. For the disability extension months, a higher percentage is allowed. Because the employer subsidy disappears, the monthly figure is often several times what the employee paid while working, which surprises almost everyone. The exact percentages are in the statute; the actual dollar amount comes from the plan's own rate sheet.

Continuation coverage can end before the maximum period in several situations: the premium is not paid within the grace period, the employer ceases to maintain any group health plan, the qualified beneficiary becomes covered under another group health plan, the beneficiary becomes entitled to Medicare, or coverage is terminated for cause on the same basis it would be for an active employee.

Because the cost is high, price the alternatives before electing. Losing job-based coverage is a qualifying life event for a special enrollment period in the health insurance marketplace and for enrollment in a spouse's employer plan, and Medicaid or a children's program may apply depending on household income. Those windows are also short and run from roughly the same date, so compare them in the same week rather than sequentially. Households already carrying medical bills should also read the Consumer Financial Protection Bureau's material on medical billing and collections before choosing the cheapest premium with the highest deductible.

Mini-COBRA and other state layers

COBRA is the federal floor and it does not reach employers under the 20-employee threshold. Most states have filled that gap with a continuation statute, commonly called mini-COBRA, that applies to small-group insured plans. These laws vary substantially: continuation periods run from a few months to three years depending on the state, the notice mechanics differ, and some apply only to fully insured plans rather than self-funded ones.

A few states also extend continuation rights beyond the federal maximum for larger employers, or give additional rights to older workers or to a surviving spouse. Because these are state insurance laws, the state insurance department rather than the Department of Labor is the place to confirm the rule. The federal side is administered by the Employee Benefits Security Administration, which also handles complaints about a plan that fails to send required notices.

Coverage questions frequently arrive alongside leave questions. Group health coverage must be maintained during leave taken under the Family and Medical Leave Act on the same terms as if the employee had kept working, and the COBRA clock generally starts when that leave ends without a return, not when it begins. Employees co-ordinating leave with a state wage-replacement program should read our explainer on state paid family and medical leave alongside federal leave, because paid leave benefits and health coverage continuation are governed separately.

Common questions

I never got an election notice. Have I lost the right?

Probably not. The 60-day election window runs from the later of the loss of coverage or the day the notice is provided, so a notice that never arrives generally has not started the clock. Contact the plan administrator in writing and keep proof of the attempt. Notice failures can be raised with the Employee Benefits Security Administration, and plans face penalties for them, so document the gap rather than assuming the option is gone.

Can I drop COBRA once I have it?

Yes, by stopping payment or notifying the plan, but dropping it voluntarily does not by itself create a special enrollment period in the marketplace. Exhausting the full continuation period does. This is why the choice at the start matters more than it looks: electing COBRA and abandoning it three months later can leave a person without a route into a marketplace plan until open enrollment.

Does COBRA cover my dental and vision plans too?

Yes, if they are group health plans offered by the employer. Each is elected separately, so it is possible to continue the medical plan alone and let the dental and vision plans lapse. The election form should list every plan available. Health flexible spending arrangements have their own limited continuation rules, generally lasting only through the end of the plan year in which the event occurred.

My employer has 12 employees. Do I have any continuation right?

Not under federal COBRA, which is limited to employers with 20 or more employees. Most states have a mini-COBRA statute covering small-group insured coverage, and the continuation period and mechanics vary widely from state to state. Ask the insurance carrier directly, since the notice obligation in small-group continuation laws often sits with the carrier rather than the employer.

What to do, in order

1. Write down the date coverage ends. Every deadline in this area is measured from that date or from the notice, so fix it first.
2. Send your own notice if the event is a family one. Divorce, legal separation and a child ageing off the plan require the beneficiary to notify the plan within 60 days.
3. Price three options side by side. COBRA, a marketplace plan during the special enrollment period, and a spouse's plan — compare premium, deductible and whether your doctors are in network.
4. Check prescriptions and pending treatment. Continuity of an in-progress course of care often outweighs a lower premium elsewhere.
5. Elect in writing and keep the proof. Send the form to the plan administrator named in the notice and retain a dated copy.
6. Diary the payment dates. The first payment window and each monthly grace period are hard cut-offs.

Separated parents should co-ordinate the election with any court order about children's coverage, a subject covered in our explainer on health insurance for children after separation. If a claim is refused after continuation begins, the appeal route is the plan's own process first, as set out in our explainer on claim denials, internal appeals and external review. Employers writing benefits language should keep continuation notices out of general staff policy documents, for the reasons given in our guide to employee handbooks.