COBRA Continuation Coverage
How Long Does COBRA Continuation Coverage Last After Job Loss?
COBRA is a federal law requiring employers with 20 or more employees to let departing employees and their dependents continue group health coverage for a limited period—typically 18 to 36 months—at their own expense.
COBRA applies when an employee experiences a “qualifying event”—termination, reduction in hours, divorce, or a dependent aging out of eligibility. The employer must send a COBRA election notice, generally within 14 days, and the individual has 60 days to elect coverage, which is retroactive if elected.
Coverage mirrors what the employee had while actively employed, but the individual pays the full premium plus up to a 2% administrative fee. Employers who miss COBRA deadlines face potential excise tax penalties and ERISA-based liability.
COBRA Continuation Coverage Key Facts and Deadlines:
- Applies to employers with 20+ employees; covers qualifying events like termination or reduced hours.
- Election notice generally required within 14 days; individual has 60 days to elect.
- Coverage mirrors active-employee benefits exactly, but the individual pays the full premium plus up to 2% admin fee.
- Missed or incorrect notices can trigger excise tax penalties and ERISA liability.
Frequently Asked Questions
How long can someone stay on COBRA coverage?
Typically 18 to 36 months, depending on the qualifying event.
Does COBRA cost more than active-employee coverage?
Yes—the individual pays the full premium plus up to a 2% administrative fee.
What happens if an employer misses the COBRA notice deadline?
They risk excise tax penalties and potential ERISA liability.
Can a spouse or dependent elect COBRA separately from the employee?
Yes—each qualified beneficiary, including a spouse or dependent, has an independent right to elect COBRA coverage on their own.
Is there help paying for COBRA premiums?
Some employers or state programs offer COBRA subsidies, and eligibility can also depend on federal relief programs enacted during specific periods.
Related terms: Employee Offboarding, ACA Compliance / Employer Mandate, Group Health Insurance for Small Business