The Guide
Health Insurance for The Unemployed
State Variations of COBRA Laws
Federal COBRA, applies only to employers with more than 20 employees. Some states have laws that extend these rights to individuals that have lost employment through a small company.
There are currently 40 states that have COBRA expansions laws that apply to small employers, usually determined as those that have between 2-19 employees. Extension of benefits can range from 3 months to 36 months, depending on the laws in your specific state. Loss of group health insurance through a small employer, especially in these economic times, is often a result of that company closing their doors. Like federal COBRA, the ability to continue coverage under the employer’s group health plan is unavailable if that company no longer has a group plan in effect.
If you have recently lost employment with a small employer in a state that does not have
mini-COBRA regulations, you can check with your insurance carrier to see if they can provide you with a conversion option that allows you to convert your previous coverage to an individual policy. If you have pre-existing medical conditions, there may also be other options available to you, as described in the Guaranteed Issue Individual Health Insurance section of this guide.
Each state mini-Cobra law will define the maximum premium amount that can be charged to any individual wishing to accept continuation of coverage under their previous group health insurance plan. The most common is a 2% surcharge over the existing premium amount, but this can be as high as 50% additional. The American Recovery and Reinvestment Act of 2009, as described in more detail on the preceding page, also applies to a reduction in premium for persons that are eligible for a mini-COBRA program.
For more information on the mini-Cobra laws applicable to your state, please refer to the State Variations of COBRA Laws section of our site. This is merely a summary of the law and these regulations are subject to change. Consult with a health insurance specialist in your state to verify this information if you are losing employment with a company with fewer than 20 employees.