COBRA stands for the Consolidated Omnibus Budget Reconciliation Act. It requires many employers to offer employees and their families the option to stay on the company’s group health plan temporarily after they would otherwise lose coverage.
A few basics:
- Who it covers: Federal COBRA applies to private employers with 20 or more employees, as well as state and local government plans. It does not apply to federal government plans or most church plans, according to the U.S. Department of Labor.
- What you get: The same coverage you had as an employee, with the same doctors and benefits.
- What it costs: You pay the full premium, including the part your employer used to cover, plus up to a 2% administrative fee. That is up to 102% of the plan’s cost.
COBRA is often expensive. But it lets you keep your current coverage without a gap, which matters if you are in the middle of treatment, pregnant, or managing a chronic condition.
The 7 COBRA Qualifying Events
A qualifying event is something that causes you, your spouse, or your dependent children to lose coverage under the employer’s health plan. Who qualifies depends on the event.
1. You lose your job (for any reason except gross misconduct)
This is the most common qualifying event. It applies whether you were laid off, fired, or quit. The only exception is termination for “gross misconduct” (more on that below).
Coverage lasts: up to 18 months.
2. Your work hours are reduced
If your employer cuts your hours and you drop below the plan’s eligibility threshold, such as moving from full-time to part-time, that is a qualifying event even though you still have a job.
Coverage lasts: up to 18 months.
3. The covered employee dies
If the employee who carried the coverage passes away, their spouse and dependent children can continue on the plan.
Coverage lasts: up to 36 months for the spouse and dependents.
4. Divorce or legal separation
When a marriage ends, the non-employee spouse would normally be dropped from the plan. COBRA lets them stay on it. This one comes with a catch: the employee or the spouse has to notify the plan administrator of the divorce or separation, usually within 60 days.
Coverage lasts: up to 36 months for the former spouse.
5. The covered employee becomes entitled to Medicare
In limited situations, when the employee enrolls in Medicare and their spouse or dependents lose coverage as a result, the family members can continue on COBRA. Because of how Medicare coordinates with employer plans, this event applies less often than the others.
Coverage lasts: up to 36 months for the spouse and dependents, depending on timing.
6. A child loses dependent status
When a child ages out of the plan, typically at 26 under most health plans, they can continue coverage through COBRA. As with divorce, the family must notify the plan administrator, usually within 60 days.
Coverage lasts: up to 36 months for the child.
7. The employer files for bankruptcy (retirees only)
This event is narrower. If an employer provides health coverage to retirees and files for Chapter 11 bankruptcy, retirees and their family members who lose that coverage may have COBRA rights. The Department of Labor notes that retirees with post-retirement coverage have special COBRA rights in this situation.
Coverage lasts: varies, and can extend for the life of the retiree in some cases.
How Long Does COBRA Last? A Quick Summary
| Qualifying event | Who can continue coverage | Maximum length |
| Job loss (not gross misconduct) | Employee, spouse, dependents | 18 months |
| Reduction in hours | Employee, spouse, dependents | 18 months |
| Death of covered employee | Spouse, dependents | 36 months |
| Divorce or legal separation | Spouse, dependents | 36 months |
| Employee becomes entitled to Medicare | Spouse, dependents | Up to 36 months |
| Child loses dependent status | Child | 36 months |
| Employer bankruptcy (retiree plans) | Retirees and family | Varies |
Can COBRA be extended past 18 months?
Yes, in two situations:
- Disability extension. If you or a covered family member is determined disabled by the Social Security Administration, coverage can extend by 11 months, for up to 29 months total. You have to notify the plan within 60 days of the disability determination and before the original 18 months run out. During those extra months, the plan can charge up to 150% of the premium.
- Second qualifying event. If another qualifying event happens during your initial 18 months, such as a divorce or the death of the former employee, your spouse or dependents may be able to extend coverage to 36 months total. The DOL explains that the second event only counts if it would have caused a loss of coverage on its own.
What Is Not a COBRA Qualifying Event?
Some common situations don’t trigger COBRA:
- Choosing to drop coverage during open enrollment
- Losing coverage because you stopped paying your share of the premium while still employed
- Being terminated for gross misconduct
- Taking protected medical or family leave. Under the California Family Rights Act, your employer generally has to keep your group health coverage in place while you are on leave, so there is nothing to continue yet.
What Counts as “Gross Misconduct”?
The COBRA statute doesn’t define gross misconduct, and courts have generally read the term narrowly. Poor performance, attendance problems, or ordinary mistakes typically don’t qualify. The label is usually reserved for serious, intentional wrongdoing.
That matters, because an employer that labels a firing “gross misconduct” can use it to deny COBRA. If you were fired shortly after reporting sexual harassment or discrimination, and your employer is now calling it gross misconduct, the label itself deserves a closer look. California law prohibits retaliating against employees who complain about harassment, and an inflated termination reason can be part of that pattern. See What Happens If You Report Harassment and They Fire You Anyway?
COBRA Deadlines You Need to Know
COBRA runs on strict timelines. Missing one can mean losing coverage for good.
- Employer notice to the plan: 30 days. After a job loss, reduction in hours, death, or Medicare entitlement, the employer has 30 days to notify the plan administrator.
- Your notice to the plan: 60 days. For divorce, legal separation, or a child losing dependent status, it’s on you or your family to notify the plan.
- Election notice: 14 days. Once the plan administrator learns of the event, it has 14 days to send you an election notice explaining your rights. If the employer is also the administrator, it has 44 days from the qualifying event.
- Your election window: 60 days. You have at least 60 days from the date of the election notice (or the date coverage ended, if later) to decide whether to enroll.
- First payment: 45 days. After you elect COBRA, you have 45 days to make your first premium payment.
- Monthly payments: 30-day grace period. Later payments generally have a 30-day grace period.
A useful detail: if you elect COBRA within the 60-day window, coverage is retroactive to the date you lost it. That gives you some breathing room, but don’t let the deadline pass.
Cal-COBRA: What California Adds
California has its own continuation law, called Cal-COBRA, that fills two major gaps in the federal rules.
Small employers. Federal COBRA doesn’t apply to employers with fewer than 20 employees. According to the Department of Managed Health Care, Cal-COBRA applies to employers and group health plans covering 2 to 19 employees. It allows up to 36 months of continuation coverage, and it is administered by the health plan rather than the employer.
Extra time after federal COBRA ends. If you had 18 months of federal COBRA through an insured plan, Cal-COBRA may let you buy up to 18 more months, for a combined total of 36 months. The California Department of Insurance notes that the employer’s policy generally has to be issued in California for this extension to apply.
A few Cal-COBRA details to keep in mind:
- Premiums can be up to 110% of the group rate, higher than federal COBRA’s 102%.
- Cal-COBRA generally doesn’t apply to self-funded plans, which many larger employers use. Check your plan documents or ask HR which type you have.
- Cal-COBRA extensions typically cover medical coverage, not dental or vision.
- As with federal COBRA, you have 60 days after receiving the notice to enroll.
What If Your Employer Never Sent a COBRA Notice?
Employers and plan administrators that fail to send required COBRA notices can face penalties under federal law, and a missing notice can affect your deadlines. If you lost coverage and never received an election notice:
- Federal COBRA: Contact your former employer’s HR department or plan administrator in writing.
- Cal-COBRA: Contact the health plan directly, since the plan, not the employer, handles Cal-COBRA notices.
- Keep records of your termination date, your last day of coverage, and every communication about benefits.
Also make sure your employer paid your final wages on time. Benefits and final pay problems often show up together.
Frequently Asked Questions
Is quitting your job a COBRA qualifying event? Yes. Voluntarily leaving your job is a qualifying event, just like being laid off or fired for reasons other than gross misconduct.
Can I get COBRA if I was fired? Usually, yes. The only exception is termination for gross misconduct, which is a narrow category.
Can my ex-spouse stay on my health insurance after a divorce? Through COBRA, generally yes, for up to 36 months, as long as the plan is notified of the divorce within 60 days.
Is COBRA my only option? No. Losing job-based coverage usually opens a special enrollment period for Covered California or a spouse’s employer plan. Compare costs before you decide, but keep an eye on your COBRA election deadline while you do.
Talk to a California Employment Lawyer
COBRA questions often come up at the worst time: right after a job ends. If your employer denied COBRA by calling your firing “gross misconduct,” or if you lost your job after reporting sexual harassment or discrimination, Malk Law Firm can review what happened. Michael Malk has represented California and Washington employees since founding the firm in 2007, with a focus on workplace sexual harassment and discrimination.
Contact us for a free case review.
This article provides general information about federal and California law and is not legal advice. Reading it does not create an attorney-client relationship.