Definition

COBRA is a federal law that lets employees and their families keep the employer's group health plan for a limited time after that coverage would end, for example after a job loss, fewer hours, a divorce or a death. It applies to employers with 20 or more employees, and the person who keeps the plan pays for it.

Also known as: COBRA continuation coverage, COBRA health coverage

Key figures

United States (federal)As of Oct 13, 2026

Employers covered
20 or more employees29 U.S.C. 1161(b)
Coverage after a job loss or fewer hours
18 months29 U.S.C. 1162(2)(A)(i)
Coverage after a divorce, a death or a child aging out
36 months29 U.S.C. 1162(2)(A)(iv)
Coverage with the disability extension
29 months29 U.S.C. 1162(2)(A)
Highest premium the plan may charge
102% of the plan cost29 U.S.C. 1162(3)
Highest premium in disability extension months
150% of the plan cost29 U.S.C. 1162(3)
Administration charge
2% on top of the full costU.S. Department of Labor
Time to choose COBRA
At least 60 days29 U.S.C. 1165(a)(1)
First premium due
45 days after electing29 U.S.C. 1162(3)
Grace period for monthly premiums
30 days29 U.S.C. 1162(2)(C)
Employer notice to the plan administrator
30 days29 U.S.C. 1166(a)(2)
Family notice of a divorce or a child losing dependent status
60 days29 U.S.C. 1166(a)(3)
Election notice from the plan administrator
14 days29 U.S.C. 1166(c)
State “mini-COBRA” laws
Many apply below 20 employeesU.S. Department of Labor

How it works

COBRA starts with a qualifying event: the end of a job, a cut in hours, a divorce, the death of the employee or a child aging out of the plan. After a job loss, fewer hours or a death, the employer has 30 days to tell the plan administrator. After a divorce or a child losing dependent status, the family has 60 days to tell the plan. The administrator then has 14 days to send the election notice.

Each person on the plan can choose COBRA for themselves. The window to decide lasts at least 60 days. The first payment is not due until 45 days after the person elects, and each later payment counts as on time within 30 days of its due date.

Coverage lasts 18 months after a job loss or fewer hours, and 36 months after a divorce, a death or a child losing dependent status. A person found disabled early in their COBRA coverage can stretch 18 months to 29.

The person pays the whole premium. The plan may charge up to 102 percent of its cost: the employer's former share, the employee's share and a 2 percent administration charge. In the extra disability months the cap is 150 percent. Below the federal threshold, many states have their own “mini-COBRA” laws. Employers often give the notices, premium collection and deadlines to a COBRA administrator or to benefits administration software.

Example

A logistics company with 120 staff ends a warehouse manager's job at the end of March. HR tells its COBRA administrator within days, and the administrator mails the election notice. The former manager and their spouse elect coverage within the window, pay the full premium plus the administration charge each month, and keep the same doctors and plan for up to 18 months.

How it differs from similar terms

COBRA vs Applicable Large Employer. COBRA applies to employers with 20 or more employees and keeps former employees on the group plan. ALE status is a separate Affordable Care Act test, based on the average number of full-time employees in the prior year, that decides whether an employer must offer coverage to its current full-time staff.

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Frequently asked questions

What is COBRA insurance?

COBRA is not a separate insurance policy. It is the right to stay on the same group health plan you had through work, with the same doctors and benefits, after an event that would end your coverage. The difference is that you now pay the whole premium yourself, with no employer share.

How much does COBRA insurance cost?

Your plan can charge up to 102 percent of what the coverage costs: the part your employer paid, the part taken from your paycheck and a 2 percent administration charge. That is why COBRA usually costs far more than your old payroll deduction. Ask the plan administrator for your monthly amount.

What is the COBRA admin fee?

It is the charge on top of the plan's full premium. Plans may add a 2 percent administration charge, which brings the total to the 102 percent cap. During the disability extension months, the cap rises to 150 percent.

How long does COBRA last?

It depends on the event. After a job loss or a cut in hours, coverage lasts 18 months. After a divorce, the employee's death or a child losing dependent status, it lasts 36 months. A disability found early in the coverage can extend 18 months to 29.

Which employers have to offer COBRA?

Employers that sponsor a group health plan and normally had 20 or more employees in the prior year. Smaller employers are outside federal COBRA, but many states apply “mini-COBRA” laws to plans below that size, so check your state's rules.

How long do you have to elect COBRA?

At least 60 days. You do not pay anything up front: the first premium is due 45 days after you elect. After that, each monthly payment has a 30-day grace period.

Who sends the COBRA election notice?

The plan administrator. After a job loss, fewer hours or a death, the employer has 30 days to inform the administrator, which then has 14 days to send the notice. After a divorce or a child aging out, the family must inform the plan within 60 days.

What is a COBRA administrator?

The team or company that runs COBRA for a health plan: it sends election notices, collects premiums and tracks each deadline. Many employers hire a third-party administrator or use benefits administration software for it. If you do not know who yours is, ask your former employer's HR or benefits team.

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