Losing or leaving a job can be stressful, especially when it comes to maintaining health insurance. Many people turn to COBRA coverage to continue their benefits, but not all COBRA plans are the same. Understanding the differences between federal COBRA and small group COBRA (state continuation coverage) can help you make the best decision for your healthcare needs and budget.

What Is Federal COBRA?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that allows employees and their dependents to continue their employer-sponsored health insurance after job loss, a reduction in work hours, or certain life events like divorce.

Key Features of Federal COBRA:

• Available to employees of businesses with 20 or more employees
• Provides continuation of the same group health plan
• Coverage lasts up to 18 months (or up to 36 months in some cases)
• Beneficiaries must pay 100% of the premium plus a 2% administrative fee

While federal COBRA ensures uninterrupted coverage, it is often expensive since employers no longer contribute to the premium.

What Is Small Group COBRA (State Continuation Coverage)?

For businesses with fewer than 20 employees, federal COBRA does not apply. Instead, many states have their own small group continuation laws, commonly referred to as mini-COBRA or state COBRA.

Key Features of Small Group COBRA:

• Rules vary by state, with different eligibility requirements and coverage durations
• Typically available to employees of businesses with 2–19 employees
• Coverage length varies (some states offer only 3–12 months of continuation)
• Employees still pay the full cost of the premium

Since small group COBRA is regulated at the state level, it’s crucial to check the specific rules in your state to determine your eligibility and coverage period.

Are There More Affordable Options?

COBRA—whether federal or small group—can be extremely costly. Many people don’t realize they have more affordable alternatives, such as:

• Marketplace health insurance plans with subsidies
• Short-term health insurance for temporary coverage
• Spousal or parental health plans (if eligible)

Need Help Finding the Best Coverage?

If you’ve recently lost or quit a job, don’t assume COBRA is your only option. Our insurance experts can help you explore cheaper, high-quality health plans that fit your needs. Contact us to review your options and secure the right coverage at the best price!