COBRA
A federal law that lets employees (and their dependents) temporarily keep their employer group health coverage after certain qualifying events, like job loss, by paying the full premium themselves.
COBRA (the Consolidated Omnibus Budget Reconciliation Act) requires most employers with 20 or more employees to offer continued access to the same group health plan after a “qualifying event” — job loss, reduction in hours, divorce, or a dependent aging off the plan, among others. Coverage typically extends 18 to 36 months depending on the qualifying event.
Who pays what: the person electing COBRA generally pays the full premium — both the portion the employer used to cover and the employee’s own share — plus up to a 2% administrative fee. This makes COBRA coverage continuity, not a subsidized benefit.
Why it matters for employers: COBRA compliance involves specific notice timelines and administrative obligations, and getting them wrong can create real liability. Many employers use a third-party COBRA administrator, and it’s a common area where a broker helps make sure the notice and election processes are being handled correctly.
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