When Do You Need to Offer COBRA? Rules and Deadlines

Who has to offer COBRA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) applies to private-sector group health plans of employers that had at least 20 employees on more than 50 percent of their typical business days in the previous calendar year. It also applies to state and local government plans. It does not apply to plans of the federal government or of churches and certain church-related organizations.

Count both full-time and part-time employees. Each part-time employee counts as a fraction: hours worked divided by the hours needed to be full time. If full time is 40 hours a week, someone working 20 hours counts as half an employee. Because the test looks at the previous calendar year, a company that passes 20 employees in the spring usually becomes subject to COBRA the following January.

A "group health plan" includes medical, hospital, prescription drug, dental and vision coverage, whether insured or self-funded. Plans that provide only life insurance or disability benefits are not covered.

What triggers COBRA and for how long

Qualifying events and maximum coverage periods under federal COBRA
Qualifying event	Who can elect	Maximum coverage
End of employment (for any reason except gross misconduct) or reduction in hours	Employee, spouse, dependent children	18 months
Disability determined by Social Security, during an 18-month period	Each qualified beneficiary in the family	29 months (an 11-month extension)
A second qualifying event during the 18 months	Spouse and dependent children	36 months from the original event
Death of the employee, divorce or legal separation, employee becomes entitled to Medicare, child loses dependent status	Spouse and dependent children	36 months

A plan may offer longer coverage than the law requires. Coverage can also end early for specific reasons, such as unpaid premiums.

The notices and their deadlines

General notice: the plan must give each covered employee and spouse a general notice of COBRA rights within the first 90 days of coverage. Many plans do this through the summary plan description.
Employer notice to the plan: when employment ends, hours are cut, the employee dies or becomes entitled to Medicare, the employer must notify the plan administrator within 30 days after the event.
Employee notice to the plan: for divorce, legal separation or a child losing dependent status, the employee or family member notifies the plan. The plan can set a deadline, but it cannot be shorter than 60 days.
Election notice: the plan administrator must send the election notice within 14 days after receiving notice of the qualifying event. The DOL publishes model general and election notices.
Election period: each qualified beneficiary gets at least 60 days to elect, counted from the later of the date the election notice is provided or the date coverage would otherwise end.

If your plan is insured, your insurer or a COBRA administrator often handles the election notice. The 30-day duty to tell the plan that employment ended is still yours.

What people pay

The premium can be up to 102 percent of the plan's cost for a similarly situated active employee (the full cost, both employer and employee shares, plus 2 percent for administration).
During the 11-month disability extension, it can be up to 150 percent.
You cannot require payment at the time of election. The first payment is due no sooner than 45 days after the election, and later payments get at least a 30-day grace period.
You can choose to pay some or all of the premium, for example as part of a severance package.

Under 20 employees: state continuation laws

Many states have their own continuation laws, often called mini-COBRA. Most apply only to insured plans, because states regulate insurance, not self-funded plans. These are the rules confirmed on each state's own site:

State continuation coverage, verified on official state sites
State	Who it covers	How long	Notes
California (Cal-COBRA)	Employers with 2 to 19 eligible employees on at least 50 percent of working days; insured plans and HMOs, not self-insured plans	Up to 36 months	People who use up 18 months of federal COBRA can extend through Cal-COBRA to a combined 36 months.
New York	Employers with fewer than 20 employees	Up to 36 months	Premium up to 102 percent. The employee requests continuation in writing within 60 days of the later of termination or the notice of rights.
New Jersey	Employers with 1 to 50 employees that buy a small group health plan	Same periods as federal COBRA	Premium up to 102 percent. Employers with 20 to 50 employees must follow both COBRA and the state law.
Texas	Group plans subject to Texas insurance law, not self-funded plans	9 months if not eligible for COBRA; 6 more months after COBRA ends	The employee must have had coverage for the 3 months before the job ended. Usually not available to someone fired.
Florida	Employers with fewer than 20 employees	18 months (29 with a disability)	Premium up to 115 percent. The former employee notifies the insurance carrier within 63 days of the qualifying event.

Other states, including Illinois, also have continuation laws. Ask your insurer which state law your policy follows and who sends the notices.

Common mistakes

Counting only full-time staff. Part-time employees count as fractions and can push you over 20.
Missing the 30-day notice to the plan administrator because the employee quit rather than being let go. Both are qualifying events.
Treating "gross misconduct" as an easy exit from COBRA. It is the only reason for ending employment that removes COBRA rights, so have a lawyer review any denial on that basis.
Forgetting dental and vision plans. They are group health plans too.
Assuming a self-funded plan gets state continuation rules. State mini-COBRA laws generally reach insured plans only.

Common questions

Do small businesses have to offer health insurance at all?

COBRA only applies if you already offer a group health plan. Whether you have to offer one at all is a separate question, covered in do small businesses have to offer health insurance.

Does an employee fired for poor performance get COBRA?

Yes, as a rule. Ending employment for any reason other than gross misconduct is a qualifying event. If you are thinking of denying COBRA for misconduct, get legal advice first.

Who sends the COBRA election notice?

The plan administrator, within 14 days after learning of the qualifying event. That is often your insurer or a COBRA vendor, but the employer must tell them within 30 days that employment ended.

How long does a former employee have to sign up?

At least 60 days from the later of the date the election notice is provided or the date coverage would end.

How MambaHR handles this

MambaHR keeps your employee records and prepares the COBRA continuation notices at offboarding. Federal and state continuation questions get answers with the law cited, and unclear cases go to a person. Every change is logged.

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Sources

Last reviewed October 2, 2026. This page is general information, not legal advice. Laws change and exceptions apply, so check the sources above or an employment lawyer before you act on a specific case.