What is COBRA Continuation Coverage?
The right to keep employer health coverage after leaving a job - at the employee own cost.
COBRA Continuation Coverage: definition
When employment ends or hours drop below the benefits threshold, group health coverage would normally stop. COBRA gives eligible employees the right to continue the same coverage temporarily - typically up to 18 months, longer in some cases - but they pay the full premium plus a small administrative fee, so it is often costly. COBRA generally applies to employers with 20 or more employees; smaller employers may face similar state continuation rules.
- Triggered by qualifying events: termination, reduced hours, and others
- Coverage typically continues up to 18 months (sometimes 29 or 36)
- The individual usually pays the full premium plus up to a 2% admin fee
- Applies to employers with 20+ employees; state rules may cover smaller ones
How Fintra handles it
Fintra tracks benefits enrollment and qualifying events like terminations on the same platform that runs payroll, so the data needed to trigger and administer COBRA - who lost coverage, when, and which plan - is already captured. This supports timely notices and continuation, though the formal COBRA administration and notices should follow your plan and legal requirements.
- Qualifying events and benefits enrollment captured with payroll
- Coverage and effective dates available to support COBRA administration
- Termination workflows surface who becomes COBRA-eligible
Worked example
Frequently asked questions
Who is eligible for COBRA?
Employees and covered dependents who lose group health coverage due to a qualifying event - job loss (except for gross misconduct), reduced hours, divorce, or certain other events - at employers with 20 or more employees. Smaller employers may be covered by comparable state continuation laws.
How long does COBRA coverage last?
Typically up to 18 months after the qualifying event, extended to 29 months for certain disabilities or up to 36 months for events like divorce or a dependent aging out. The exact period depends on the qualifying event and circumstances.
Why is COBRA expensive?
Because the former employer no longer subsidizes the premium. The individual pays the full cost of coverage - both the employee and former employer portions - plus an administrative fee of up to 2%. That is why COBRA premiums are much higher than what employees paid while working.
Do small businesses have to offer COBRA?
Federal COBRA applies to employers with 20 or more employees. Smaller employers are generally exempt from federal COBRA but may be subject to state mini-COBRA continuation laws with similar protections. Requirements depend on size and state.
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