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State COBRA Laws

Federal Small Employer Exemption Often Eliminated by State COBRA law

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law concerning an individual’s right to continue health insurance benefits at his or her own expense for up to 36 months in the immediate aftermath of a qualifying event.

The federal law exempts small employers but this benefit has been largely erased by 40 states. These states have adopted their own “mini-COBRA” legislation to expand the coverage requirement to businesses with as few as two full-time employees.This article will explain the basics of federal and state COBRA laws concluding with a list of the 40 states that have enacted mini-COBRA expansions.

State COBRA laws often cover the gap for small businesses with fewer than 20 employees, which are exempted under federal law.COBRA Qualifying Events

Qualifying events are those which cause an individual to lose health insurance coverage. The type of qualifying event determines who the qualified beneficiaries are and for how many months a plan must offer health coverage under COBRA.

COBRA qualifying events for employees are:

  • Voluntary or involuntary termination of employment for reasons other than gross misconduct; and,
  • Reduction in the number of hours worked.

COBRA qualifying events for spouses are (all events pertain to the covered employee, not the spouse):

  • Voluntary or involuntary termination of employment for any reason other than gross misconduct;
  • Reduction in hours worked;
  • Becoming eligible for Medicare;
  • Divorce or legal separation; and,
  • Death.

COBRA qualifying events for dependent children are the same as for a spouse, plus:

  • Loss of dependent child status under the plan rules.

COBRA Financial Responsibility

The employee or their beneficiary customarily pays for the extended coverage after a qualifying event.

COBRA Qualifying Employers

Under federal COBRA law, qualifying employers are those with 20 or more full-time employees on 50% or more days of the year. Smaller employers are exempt from federal COBRA requirements but may fall under state COBRA law depending on the state wherein they live.

For more information on federal COBRA law, the Department of Labor has published, An Employer’s Guide to Group Health Continuation under COBRA. It is available to view or print at this link.

Mini-COBRA Laws

Most state COBRA laws extend the qualifying employer definition to as low as 2 full-time employees. Many also differ from federal COBRA law in setting how many months of coverage must be made available following a qualifying events. A handful of states even eliminate the, “for reasons other than gross misconduct” clause for instances of involuntary termination.

It is important to know the COBRA laws for your state.  Following is a list of the 40 states with mini-COBRA laws. Each link goes to a Web page giving key information on the law in that state.

States with Mini-COBRA Expansions as of January 1, 2017:

  1. Arkansas
  2. California
  3. Colorado
  4. Connecticut
  5. District of Columbia
  6. Florida
  7. Georgia
  8. Illinois
  9. Iowa
  10. Kansas
  11. Kentucky
  12. Louisiana
  13. Maine
  14. Maryland
  15. Massachusetts
  16. Minnesota
  17. Mississippi
  18. Missouri
  19. Nebraska
  20. Nevada
  21. New Hampshire
  22. New Jersey
  23. New Mexico
  24. New York
  25. North Carolina
  26. North Dakota
  27. Ohio
  28. Oklahoma
  29. Oregon
  30. Rhode Island
  31. South Carolina
  32. South Dakota
  33. Tennessee
  34. Texas
  35. Utah
  36. Vermont
  37. Virginia
  38. West Virginia (download)
  39. Wisconsin
  40. Wyoming

States with NO COBRA EXPANSION as of January 1, 2017:

  1. Hawaii
  2. Alabama
  3. Alaska
  4. Delaware
  5. Arizona
  6. Idaho
  7. Indiana
  8. Michigan
  9. Montana
  10. Pennsylvania
  11. Washington

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