Does COBRA Apply to Small Employers?

Only at 20 or more employees. Federal COBRA applies to employers with at least 20 employees on more than half of their typical business days in the previous calendar year. Below that, your state's continuation law, often called mini-COBRA, decides what you get, and a few states have none at all.

Reviewed by Prodest Insurance Group, a licensed insurance agency (NPN 19515569) · Updated 24 September 2026 against current federal guidance.

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Federal COBRA vs. State Continuation

	Federal COBRA	State continuation (mini-COBRA)
Who it covers	Employers with 20 or more employees, including state and local governments	Usually insured plans at employers too small for federal COBRA
How long	18 months, up to 36 for some events	From 120 days in Arkansas to 36 months in California
What you pay	Up to 102 percent of the full premium	Usually up to 102 percent. California allows up to 110 percent; Rhode Island charges the group rate
Time to elect	60 days	Often shorter, and as little as 10 days in some states
Self-funded plans	Covered	Generally not reached, because state insurance law governs insured plans

Every state works differently below the 20-employee line. Find your state's rules →

How Employees Are Counted

The test looks back at the previous calendar year. An employer is covered if it had at least 20 employees on more than 50 percent of its typical business days that year.

Both full-time and part-time employees count, but part-time employees count as a fraction based on hours worked. If full time is 40 hours a week, someone working 20 hours counts as half an employee, and someone working 16 hours counts as 0.4.

Federal COBRA applies to private-sector employers and to state and local governments, whether the plan is insured, an HMO, or self-funded. It does not apply to federal government plans, which are covered by a separate law, or to churches and certain church-related organizations. It also does not apply to plans that provide only life insurance or disability benefits.

What State Continuation Looks Like

Most states extend some form of continuation to employers too small for federal COBRA, but the rules vary widely. Some states, such as New Jersey, New Hampshire, and South Dakota, closely follow federal COBRA. Others offer much less: Oregon and Delaware give nine months, and Arkansas gives 120 days.

A few states have no general continuation law for small employers at all, including Alabama, Idaho, and Michigan. Others limit it to involuntary job loss, as Nebraska, Rhode Island, and West Virginia do.

The deadlines are often the biggest trap. Arkansas and North Dakota give ten days to ask in writing. Nebraska requires the election and first premium by certified mail within ten days of the notice. Mississippi requires both before your coverage ends.

Why the Difference Matters

If you leave an employer with twenty or more employees, federal COBRA applies and state law usually changes nothing. If the employer was smaller, the state law decides how long you can stay on the plan, what it costs, and how quickly you must act.

Either way, losing job-based coverage opens a 60-day Special Enrollment Period on the Marketplace. That window runs whether or not you have any continuation right, and a Marketplace plan with a tax credit may cost less than either.

If You Worked for a Small Employer

Find out the employer's size. Ask HR or the plan administrator whether the employer had 20 or more employees last year.
Look up your state's rule. Continuation length, cost, and eligibility differ by state.
Note the deadline straight away. State windows can be far shorter than the 60 days federal COBRA allows.
Compare Marketplace plans while your 60-day Special Enrollment Period is open.
Speak with a licensed agent if the deadline is close. There is no cost.

COBRA rules by state →

Not sure which rules apply to you?

A licensed agent can check whether federal COBRA or your state's law applies, work out your deadline, and compare Marketplace plans, at no cost.

This page is general information, not advice about your specific situation. Your plan documents and the Marketplace determine what applies to you. A licensed agent can review your circumstances with you.

Common Questions

Does COBRA apply to employers with fewer than 20 employees?

No. Federal COBRA applies to employers with 20 or more employees. Below that, your state's continuation law may give you a right to continue coverage.

How are part-time employees counted for COBRA?

As a fraction of a full-time employee, based on hours worked. If full time is 40 hours, a 20-hour employee counts as half.

Which year is used to count employees?

The previous calendar year. The employer must have had at least 20 employees on more than 50 percent of its typical business days.

What is mini-COBRA?

The common name for a state continuation law that covers employers too small for federal COBRA. Each state sets its own length, cost, and deadlines.

Is state continuation the same as COBRA?

No. It is often shorter, can have a much shorter election window, and generally applies only to insured plans. Some states follow federal COBRA closely; a few have no law at all.

Does COBRA apply to church or federal government plans?

No. Federal government plans are covered by a separate law, and churches and certain church-related organizations are exempt.

Does COBRA apply to self-funded plans?

Yes, if the employer has 20 or more employees. State continuation laws generally reach only insured plans.

What if my state has no continuation law?

Losing job-based coverage still opens a 60-day Special Enrollment Period on the Marketplace, and you may qualify for a tax credit or Medicaid.

Sources

The information on this page is drawn from the following federal sources. Your own plan documents govern your specific situation.

U.S. Department of Labor, An Employer's Guide to Group Health Continuation Coverage Under COBRA
U.S. Department of Labor, FAQs on COBRA Continuation Health Coverage for Employers and Advisers
U.S. Department of Labor, FAQs on COBRA Continuation Health Coverage for Workers
HealthCare.gov, Special Enrollment Period (glossary)
State continuation statutes, as cited on each state guide

Small employer, short deadline?

A licensed agent can confirm which rules apply to you, check your dates, and put continuation and Marketplace options side by side. No cost, no obligation.