COBRA was enacted in 1986 to give workers who are separating from their employment — whether voluntarily or involuntarily — the option of continuing their employer-provided health insurance coverage temporarily at group rates by paying the full premiums.
The federal act only regulates private-sector companies with 20 or more employees. States must therefore pass laws to offer the insurance extension to smaller businesses as well. These state laws are called “mini-COBRA” laws.
“You can almost think of it as two separate circles,” said Christine Keller, an attorney with Groom Law Group in Washington, D.C. “There’s mini-COBRA and there’s federal COBRA, and they don’t really intersect.”
According to Frank Palmieri, an attorney with Palmieri & Eisenberg in Princeton, N.J. 43 states and Washington, D.C., decided that they wanted to protect small businesses, and so they created rules that are similar but not exactly aligned with federal COBRA.”
State mini-COBRA laws differ slightly. For example, while mini-COBRA laws apply to companies with fewer than 20 employees, each state has its own method of counting qualified employees. A business in California may tip into the federal COBRA category if it has 20 or more employees on 50% of the working days in the previous calendar year. It is therefore crucial for employers close to the 20-employee threshold to review their state guidelines.
While federal COBRA lasts 18-36 months,...
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