Health Insurance Continuation Coverage Under COBRA

January 16, 2009 – August 13, 2021 R40142

Health Insurance Continuation Coverage
August 13, 2021
Under COBRA
Ryan J. Rosso
Health insurance helps to protect individuals and families against financial loss. Having
Analyst in Health Care
health insurance also promotes access to regular health care. Most Americans with
Financing
private health insurance are covered through an employer, or through the employer of a

family member. The Census Bureau estimates that in 2019, 56.4% of the United States
population had health insurance through an employer.

When an employee is terminated, his or her employer-sponsored health insurance usual y ends within 30 to 60
days. If that health insurance is family coverage, then a worker’s family members would also lose access to this
coverage. This same issue may also be faced by families when a working family member experiences a reduction
in hours in the workplace, dies, or divorces his or her spouse.
In 1985, Congress passed legislation to provide certain individuals who lose access to employer-sponsored health
insurance coverage with temporary access to continue such coverage. Under Title X of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (COBRA; P.L. 99-272), a private-sector employer with 20 or more employees
that provides health insurance benefits must provide qualified employees and their families the option of
continuing their coverage under the employer’s group health insurance plan in the case of certain events.
Employers that fail to provide the continued health insurance option are subject to penalties. (COBRA also
created similar requirements on state and local government employers; however, this report focuses on the
requirements applicable to private-sector employers.)
COBRA coverage usual y lasts for 18 months but can be extended up to a total of 36 months, depending on the
nature of the triggering event. Those who take up their COBRA benefits may be charged up to 100% of the
premium, plus an additional 2% for the administrative costs incurred. For context, the Agency for Healthcare
Research and Quality Medical Expenditure Panel Survey estimated the average health insurance premium among
private-sector employers in 2019 was $6,972 for single coverage and $20,486 for family coverage. However, from
April 1, 2021, through September 30, 2021, certain COBRA-eligible individuals may be eligible for a 100%
subsidy of their COBRA coverage premiums (including administrative fees). As such, these individuals would not
be required to pay any premium amounts, or administrative fee amounts, for COBRA coverage during this period.
Employees and family members are general y eligible for COBRA continuation coverage if the employee is
voluntarily or involuntarily terminated or has a reduction in hours and as a result of either event, loses coverage.
In addition, family members may also be eligible for COBRA continuation coverage as a result of other
qualifying events. For example, spouses and dependent children can also qualify for COBRA benefits in the event
of divorce or the death of the family member with employer-sponsored health coverage.
This report provides a simplified explanation of who qualifies for COBRA continuation coverage, the nature of
COBRA continuation coverage, and corresponding employer and employee responsibilities. It also incorporates
descriptions of the temporary relief that was provided on May 4, 2020, by the Department of Labor Employee
Benefits Security Administration and Internal Revenue Service in response to the Coronavirus Disease 2019
(COVID-19) pandemic (as it pertains to COBRA continuation coverage). This relief extends various COBRA
time frames and was intended to help minimize the possibility that individuals would lose health insurance
because they failed to comply with certain COBRA time frames during the COVID-19 pandemic. This report also
includes a high-level description of the temporary COBRA premium assistance included in the American Rescue
Plan Act of 2021 (ARPA; P.L. 117-2).
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Health Insurance Continuation Coverage Under COBRA

COBRA Coverage
Most individuals with private health insurance are covered through an employer, or through the
employer of a family member. In 2019, about 57% of private and nonfederal public employers
offered health insurance coverage to their full-time employees, with most of these employers
offering the option of family coverage as wel .1 The Census Bureau estimates that in 2019, 56.4%
of the United States civilian, noninstitutionalized population (including employees, their spouses,
and their dependents) had their insurance through an employer.2 When workers lose their jobs,
they can also lose their health insurance. If that health insurance is family coverage, then a
worker’s family members can also become uninsured.
Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA; P.L. 99-272)
requires most private-sector employers with more than 20 employees that offer health insurance
to continue coverage for their employees under certain circumstances.3 The law affects private-
sector employer group health plans through amendments to the Employee Retirement Income
Security Act of 1974 (ERISA) and the Internal Revenue Code (IRC).4
References to COBRA Coverage
Col oquial y, the term COBRA coverage is often used to refer to al coverage made available to employees who
experience qualifying events (e.g., termination of employment) that resulted in a loss of employer-sponsored
coverage. However, the term COBRA refers to the Consolidated Omnibus Budget Reconciliation Act of 1985,
which is the law that created the continuation coverage requirements in the Employee Retirement Income
Security Act (ERISA), Public Health Service Act (PHSA), and Internal Revenue Code (IRC). The ERISA and IRC
requirements apply to private-sector employers, whereas the PHSA requirements apply to state and local
government employers.
Other laws have since created other continuation coverage requirements. For example, P.L. 100-654 established
“COBRA-like” continuation coverage requirements for the Federal Employee Health Benefit Program (FEHB), the
program that provides health insurance to federal employees, retirees, and their dependents. Under these
requirements, the federal government must make coverage available to federal employees participating in FEHB
who experience certain qualifying events (e.g., separation from service). Even though these requirements address
continuation coverage in the context of federal employees, they were not included in the Consolidated Omnibus
Budget Reconciliation Act of 1985 and technical y are not considered COBRA continuation coverage requirements.
In other words, not al continuation coverage requirements are COBRA requirements.
This report focuses on the COBRA continuation coverage requirements as they pertain to private-sector
employers (i.e., the ERISA and IRC requirements).

1 Kaiser Family Foundation, Employer Health Benefits 2019 Annual Survey, September 2019, pp. 44, 52, at
https://files.kff.org/attachment/Report -Employer-Health-Benefits-Annual-Survey-2019.
2 Katherine Keisler-Starkey and Lisa N. Bunch, Health Insurance Coverage in the United States: 2019, U.S. Census
Bureau, September 2020, at https://www.census.gov/content/dam/Census/library/publications/2020/demo/p60-271.pdf.
3 T itle X of the Consolidated Omnibus Budget Reconciliation Act of 1985 also created similar continuation coverage
requirements on state and local governments. T hese requirements are included in the Public Health Service Act and are
administered by the Department of Health and Human Services. T his report focuses on the COBRA continuation
coverage requirements as they pertain to private-sector employers.
4 As such, the regulations for COBRA are written by the Department of Labor (DOL) and the Interna l Revenue Service
(IRS). DOL has the authority to interpret COBRA reporting and disclosure provisions, and the Department of the
T reasury has the authority to interpret the coverage and tax sanction provisions. Department of the T reasury, IRS,
“Continuation Coverage Requirements Applicable to Group Health Plans,” 64 Federal Register 5160-5188, February 3,
1999.
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Before enactment of COBRA, if an employee’s job was (voluntarily or involuntarily) terminated,
the insurance offered by the employer also ceased, usual y within 30 to 60 days.5 Although some
employers offered the option of buying into the group plan post-termination, there was no
certainty of that option. In 1985, few states had laws requiring that insurance policies sold in their
states include a continuation of coverage option for terminated workers. However, self-insured
employers (employers that assume the risk of the health care costs of their employees rather than
using private insurers) were not regulated by these state-mandated benefit laws; self-insured plans
were regulated at the federal level under ERISA.
As such, health insurance coverage for these affected workers and their families was not
consistently available. Upon termination, these unemployed individuals likely would have been
able to obtain health insurance coverage only from one of the following options (if eligible): a
spouse’s employer, the individual market (which at the time al owed for coverage denials and
medical underwriting), or Medicaid. If the individual did not (or was unable to) enroll in any of
these coverages, the individual would have gone uninsured. Congress enacted COBRA to expand
access to coverage for those individuals who become uninsured as a result of changes in their (or
their family member’s) employment or their family status.
Today, COBRA continuation coverage stil represents one potential coverage option for qualified
individuals who are terminated or experience another qualifying event—although more recent
policy changes to the individual market (i.e., guaranteed issue) no longer make COBRA
continuation coverage the only health insurance option available to certain individuals (i.e.,
COBRA-eligible individuals who would not have been eligible for Medicaid or a spouse’s
employer-sponsored coverage and would otherwise have been denied coverage in the individual
market).6 Although employers are al owed to charge 102% of the group plan premium for
COBRA coverage, COBRA continuation coverage may stil be less expensive than similar
coverage available in the individual insurance market when individuals are not eligible for
subsidies through the health insurance exchanges.7
The rest of this report general y explains who qualifies for COBRA continuation coverage, the
nature of COBRA continuation coverage, and corresponding employer and employee
responsibilities. It also incorporates descriptions of the temporary relief that was provided on May
4, 2020, by the Department of Labor (DOL) Employee Benefits Security Administration and
Internal Revenue Service (IRS) in response to the Coronavirus Disease 2019 (COVID-19)
pandemic (as it pertains to COBRA continuation coverage).8 This relief extends various COBRA
time frames and was intended to help minimize the possibility that individuals would lose health
insurance because they failed to comply with certain COBRA time frames during the COVID-19
pandemic. The extensions included in the temporary relief are discussed in the “Notice
Requirements,” “Election of Coverage,” and “Paying for COBRA” sections. Final y, this report

5 Voluntary terminations include retirement, resignation, and failure to return to work after a leave of absence.
Involuntary terminations include layoffs and firings.
6 For a discussion of health insurance options available for those who experience a loss in employment, see CRS In
Focus IF11523, Health Insurance Options Following Loss of Em ploym ent.
7 Individuals who enroll in individual market coverage through a health insurance exchange and meet income and other
eligibility criteria may receive financial assistance through a federal tax credit and cost -sharing subsidies. For more
information on the financial assistance available through the exchanges, see CRS Report R44425, Health Insurance
Prem ium Tax Credit and Cost-Sharing Reductions.
8 IRS and Employee Benefits Security Administration, “Extension of Certain T imeframes for Employee Benefit Plans,
Participants, and Beneficiaries Affected by the COVID–19 Outbreak,” 85 Federal Register 26351-26355, May 4, 2020.
Hereinafter, 85 Federal Register 26351.
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provides a high-level description of the temporary COBRA premium assistance included in the
American Rescue Plan Act of 2021 (ARPA; P.L. 117-2).
More detailed information is available from DOL’s Continuation of Health Coverage (COBRA),
at https://www.dol.gov/general/topic/health-plans/cobra.
General Requirements
Under COBRA, most employers that provide health insurance benefits must offer the option of
continued health insurance coverage at group rates to qualified employees and their families who
are faced with loss of coverage due to certain events. Coverage general y lasts 18 months but,
depending on the circumstances, can last for longer periods. COBRA requirements apply to fully-
insured and self-insured firms. An employer must comply with COBRA even if it does not
contribute to the health plan; it need only maintain such a plan to come under the statute’s
continuation coverage requirements.9
Covered Employers
COBRA covers al employers, with the following exceptions:10
 Small employers.11 Employers with fewer than 20 employees are not covered
under COBRA.12 Most states have attempted to address this issue through “mini-
COBRA” laws, which require that continuation coverage be offered to employees
in smal er firms. However, in some states, the continuation coverage may be
offered for a shorter period or have different requirements than federal COBRA
requirements.13

9 On February 3, 1999, the IRS published final rules (64 Federal Register 5160-5188), effective January 1, 2000,
defining COBRA coverage requirements. Final rules addressing COBRA issues applying to business reorganizations,
bankruptcy, and COBRA’s interaction with the Family and Medical Leave Act were issued on January 10, 2001 (66
Federal Register 1843-1859). Final rules addressing notification requirements were issued on May 26, 2004 ( 69
Federal Register 30083-30112).
10 Although this report focuses on the COBRA continuation coverage requirements as they pert ain to private-sector
employers, T itle X of the Consolidated Omnibus Budget Reconciliation Act of 1985 also created similar continuation
coverage requirements on state and local governments. T hese requirements are include d in the Public Health Service
Act and are administered by the Department of Health and Human Services. For more information on state and local
government COBRA continuation coverage requirements, see Centers for Medicare & Medicaid Services, COBRA
Continuation Coverage Questions and Answers, at https://www.cms.gov/CCIIO/Programs-and-Initiatives/Other-
Insurance-Protections/cobra_qna.
11 According to the Census Bureau’s Statistics of U.S. Business, there were approximately 5.4 million firms with fewer
than 20 employees in 2018. In total, these entities employed 21.3 million people, or about 16% of employees covered
in the survey. U.S. Census Bureau, “ 2018 SUSB Annual Data T ables by Establishment Industry ,” at
https://www.census.gov/data/tables/2018/econ/susb/2018-susb-annual.html.
12 An employer is considered to meet the small employer exception during a calendar year if on at least 50% of its
typical business days during the preceding calendar year, it had fewer than 20 employees. In making this determination,
employers consider full-time and part -time employees. Part-time employees are counted as fractions of full-time
employees. Self-employed individuals, independent contractors, and directors (in the case of a corporation) are not
taken into account in this determination—although employers may need to offer such individuals COBRA continuation
coverage (if subject to COBRA requirements).
13 T he data associated with this statement are from 2013, and states may have changed their laws since this sourced
study was published. CRS was unable to identify more recent dat a on this topic. Kaiser Family Foundation, Expanded
COBRA Continuation Coverage for Sm all Firm Em ployees, at https://www.kff.org/private-insurance/state-indicator/
expanded-cobra-continuation-coverage-for-small-firm-employees/?currentTimeframe=0&sortModel=
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Health Insurance Continuation Coverage Under COBRA

 Churches and certain church-related organizations.14
 Federal government. Although federal employees are not covered under
COBRA, they have been entitled to temporary continuation of coverage (TCC)
under the Federal Employees Health Benefits Program (FEHB) since 1990.15
Qualified Beneficiaries
In general, a qualified beneficiary is
 an employee16 covered under the group health plan who loses coverage due to a
voluntary or involuntary17 termination of employment (for reasons other than
gross misconduct) or a reduction in hours;
 a retiree who loses retiree health insurance benefits due to the former employer’s
bankruptcy under Chapter 11;
 a spouse or dependent child of the covered employee (or retiree) who, on the day
before the “qualifying event” (see below), was covered under the employer’s
group health plan; or
 any child born to or placed for adoption with a covered employee during the
period of COBRA coverage.
When considering the rules around COBRA coverage (including the definitions of a qualified
beneficiary), a qualified beneficiary would not be
 an individual who declined employer-sponsored benefits;
 a worker (including an independent contractor) who did not qualify for employer-
sponsored benefits;
 an employee at an employer, regardless of size, that does not offer group health
insurance;
 family members of an employee that works for an employer that does not offer a
family option;
 an employee at an employer with fewer than 20 employees (because such
employer is exempt from federal COBRA requirements); or
 an employee of an employer that declares bankruptcy under Chapter 7 or simply
discontinues operation.

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14 COBRA requirements do not apply to church plans, which are plans that are “established and maintained … by a
church or by a convention or association of churches.” See 29 U.S.C. §1002(33).
15 Some differences exist between COBRA and FEHB T CC. For example, under FEHB, there are different eligibility
requirements, there is no extended coverage for disabled individuals, and there are no bankruptcy provisions. However,
the length of coverage and qualifying events under both plans are the same. For more information, see Term ination,
Conversion and Tem porary Continuation of Coverage, at https://www.opm.gov/healthcare-insurance/healthcare/
reference-materials/reference/termination-conversion-and-temporary-continuation-of-coverage/.
16 In this context, the term employee includes self-employed individuals, independent contractors (and their employees
and independent contractors), and directors (in the case of a corporation). As such, these individuals may be eligible for
COBRA continuation coverage if their relationship to the employer makes them eligible to be covered under the
employer’s group health plan.
17 Voluntary reasons include retirement, resignation, and failure to return to work after a leave of absence. Involuntary
reasons include layoffs, firings, and the employer’s bankruptcy under Chapter 11 of T itle 11 of the U.S. Code. Strikes
and walkouts might also trigger COBRA coverage if they result in a loss of health insurance coverage.
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Qualifying Events
Circumstances that trigger COBRA coverage are known as “qualifying events.” A qualifying
event must cause an individual to lose health insurance coverage. Losing coverage means ceasing
to be covered under the same terms and conditions as those available immediately before the
event. For example, if an employee is laid off or changes to part-time status resulting in a loss of
health insurance benefits, these are qualifying events.
The loss in coverage does not need to occur immediately after the event, but it needs to occur
before the end of the maximum period in which COBRA continuation coverage must be made
available (see “Duration of Coverage”). For example, an employee may have a reduction in hours
on July 1 of a given year that causes the employee to lose coverage on November 1 of the same
year. This employee would stil be considered to experience a qualifying event.
Events that trigger COBRA continuation coverage include the following:
 termination (for reasons other than gross misconduct), and
 a reduction in hours of employment.
Spouses and dependent children can also experience the following qualifying events leading to
their loss of health insurance coverage:
 the death of the covered employee,
 divorce or legal separation from the employee,
 the employee becomes entitled to Medicare, and
 the end of a child’s dependency under a parent’s health insurance policy.18
Under the following circumstances, a covered employer must offer a retiring employee access
either to COBRA continuation coverage or to a retiree plan that satisfies COBRA’s requirements
for benefits, duration, and premium:
 If a covered employer does not offer a retiree health plan, the retiring employee
must be offered COBRA coverage.
 If the employer offers a retiree health plan but it is different from the coverage
the employee had immediately before retirement, the employer must offer the
option of COBRA coverage in addition to the offer of the alternative retiree plan.
If the retiring employee opts for the alternative coverage and declines COBRA
coverage, then she or he is no longer eligible for COBRA.
 If the employer’s retiree health plan satisfies COBRA’s requirements for
benefits, premium, and duration, the employer is not required to offer a COBRA
option when the employee retires, and the coverage provided by the retiree plan
can be counted against the maximum COBRA coverage period that applies to the
retiree, spouse, and dependent children. If the employer terminates the retiree
plan before the maximum coverage period has expired, COBRA coverage must
be offered for the remainder of the period.

18 In this context, the term dependency refers to a child being covered by a parent’s health insurance policy. It does not
have the same definit ion of the term as it is used for tax purposes. T he end of a child’s dependency under a parent’s
health insurance policy is considered a qualifying event for dependent children only. If an employer offers dependent
coverage to its employees, the plan must make the dependent coverage available to a child until the child turns 26. See
42 U.S.C. §300gg-14.
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 If the employer files for Chapter 11 bankruptcy, the employer is required to offer
COBRA coverage to retirees who lost their retiree health insurance due to the
bankruptcy filing. In this case, the coverage can continue until the death of the
retiree. The retiree’s spouse and dependent children may purchase COBRA
coverage from the former employer for 36 months after the retiree’s death.
The Nature of COBRA Coverage
In general, a qualified beneficiary needs to be given only an opportunity to continue the coverage
that the qualified beneficiary was receiving immediately before the qualifying event. The
continuation coverage must be identical to that provided to “similarly situated non-COBRA
beneficiaries.” The term similarly situated is intended to ensure that beneficiaries have access to
the same options as those who have not experienced a qualifying event. For example, if the
employer offers an open season for non-COBRA beneficiaries to change their health plan
coverage, the COBRA beneficiary must also be able to take advantage of the open season. By the
same token, COBRA continuation coverage can be terminated if an employer terminates health
insurance coverage for al employees.
There are some exceptions to this rule. If a COBRA-covered beneficiary receiving coverage
through a region-specific plan (such as a managed care organization) moves out of that area, the
employer is required to provide the employee coverage in the new area if this can be done under
one of the employer’s existing plans. If the employee’s same coverage would not be available in
the new area but the employer maintains another plan for employees who are not similarly
situated to the beneficiary (such as a plan offered to another employment group within the firm)
and that other plan would be available in the new area, then that alternative coverage must be
offered to the beneficiary. If the only coverage offered by the employer is not available in the new
area, the employer is not obliged to offer any other coverage to the relocating beneficiary.
Duration of Coverage
The duration of COBRA coverage can vary, depending on the qualifying event:
 In general, when a covered employee experiences a termination or reduction in
hours of employment, COBRA coverage for the employee and the employee’s
spouse and dependent children may continue for 18 months.
 Retirees who lose retiree health insurance benefits due to the bankruptcy (a
reorganization under Chapter 11) of their former employer, may elect COBRA
coverage that can continue until their death. The spouse and dependent children
of the retiree may continue the coverage for an additional 36 months after the
death of the retiree.
 For al the other qualifying events listed above (death of employee, divorce or
legal separation from employee, employee becoming entitled to Medicare, the
end of a child’s dependent status under the parents’ health policy), the coverage
for the qualified beneficiaries may continue for 36 months.
Qualified beneficiaries entitled to 18 months of COBRA continuation coverage (i.e., as a result of
a termination or reduction in hours) may receive an extension of such coverage if either of two
situations occur.
First, if qualified beneficiaries experience a second qualifying event (e.g., death of a covered
employee, divorce or legal separation from employee) during an 18-month COBRA coverage
period, the qualified beneficiary may continue COBRA coverage for a total of 36 months if the
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second event would have caused a loss in coverage (absent the first event). In essence, the
qualified beneficiary would be eligible for an 18-month extension.
Second, COBRA continuation coverage may be extended beyond 18 months for qualified
beneficiaries who become disabled at any time during the beginning of the COBRA continuation
coverage period. If the Social Security Administration (SSA) makes a determination that the date
of a qualified beneficiary’s onset of disability occurred during the first 60 days of COBRA
coverage or earlier, the employee and the employee’s spouse and dependents are eligible for an
additional 11 months of continuation coverage. This is a total of 29 months from the date of the
qualifying event (which must have been a termination or reduction in hours of employment). This
provision was designed to provide a source of coverage while individuals wait for Medicare
coverage to begin.19 (See “Paying for COBRA” regarding COBRA premiums during these
additional 11 months.)
Employers are permitted to provide longer periods of COBRA coverage and under some
conditions, COBRA coverage can end earlier than the full term. Although coverage must begin on
the date of the qualifying event, it can end on the earliest of the following:
 the first day for which timely payment of the premium is not made (payment is
timely if it is made within 30 days of the payment due date and payment cannot
be required before 45 days after the date of election (see “Paying for COBRA”);
 the date on which the employer ceases to maintain any group health plan;20
 the first day after the qualified beneficiary becomes covered under another
employer’s group health plan, unless the new plan excludes coverage for a
preexisting condition;21
 the date the qualified beneficiary is entitled to Medicare benefits; or
 (for a qualified beneficiary during a disability extension), the first day of the
month that is more than 30 days after the date in which the beneficiary receives a
final determination from the SSA, stating that the beneficiary is no longer
disabled.
In addition, a qualified beneficiary’s COBRA continuation coverage may end early in the event
that the beneficiary engages in conduct that would result in the termination of coverage for
similarly situated non-COBRA employees (e.g., fraud).
COBRA Coverage and Medicare
COBRA coverage varies for Medicare beneficiaries depending on whether they become eligible
for COBRA before or after they become entitled to Medicare. Medicare law requires that certain
employers (those with 20 or more employees) provide their employees who are Medicare

19 After a determination of disability, there is a 5-month waiting period for Social Security disability cash benefits and
another 24-month waiting period for Medicare benefits.
20 A bankruptcy under Chapter 7 of T itle 11 of the U.S. Code would be such an instance. Chapter 7 bankruptcies
(business liquidations) are distinct from Chapter 11 (reorganization) bankruptcies. Under Chapter 7, the emp loyer goes
out of existence. COBRA is provided through the employer; if there is no employer, there is no COBRA obligation.
Under Chapter 11, the employer remains in business and m ay be required to honor its COBRA obligations.
21 T he preexisting condition requirement language predates the Patient Protection and Affordable Care Act (ACA; P.L.
111-148, as amended), which prohibit s group health plans from excluding coverage for preexisting health conditions.
See 42 U.S.C. §300gg-3. Prior to the ACA, group health plans were sometimes allowed to temporarily exclude benefits
for preexisting conditions during what was referred to as an “ exclusion period.”
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beneficiaries with the same coverage offered to their other employees. This includes family
coverage, if it is offered.22
If a working Medicare beneficiary experiences a qualifying event (e.g., retirement, job
termination), he or she becomes eligible for 18 months of COBRA coverage from the date of the
qualifying event. If the beneficiary’s family members lose coverage because of the qualifying
event, they would be eligible for COBRA coverage for up to 36 months from the date on which
the employee became entitled to Medicare. For example, if an employee becomes entitled to
Medicare in January of a given year and then retires 12 months later in January of the subsequent
year, the covered family members would be eligible for 24 months of COBRA coverage, rather
than 36 months. However, no matter when the qualifying event and Medicare entitlement occurs,
COBRA coverage for qualified family members can never be less than 18 months.
On the other hand, if an individual is receiving COBRA benefits and becomes entitled to
Medicare during the 18-month period, COBRA coverage can be terminated early (see above,
under “Duration of Coverage”). In this case, the individual’s covered family members can
continue their COBRA coverage for up to 36 months from the date of the original qualifying
event.
Notice Requirements
Employers, employees, and the employer’s health plan administrators al have to meet
requirements for notifying each other regarding certain aspects of COBRA.
 At the time an employee first becomes covered under a health plan, the plan
administrator must provide written notification to the employee and his or her
spouse of their rights if a qualifying event should occur.
If a qualifying event occurs, other notices are required.
 The employer must notify the plan administrator of the event within 30 days of
the employee’s death, termination, or reduction in hours; the employee becoming
entitled to Medicare; or the beginning of the employer’s bankruptcy proceedings.
 The employee or former employee (or qualified spouse/dependent) must notify
the plan administrator within 60 days of a divorce or legal separation of a
covered employee, a dependent child’s ceasing to be a dependent of the covered
employee under the policy, or the occurrence of a second qualifying event after a
beneficiary has become entitled to a maximum 18 (or 29) months of COBRA.
 COBRA beneficiaries who are determined by the SSA to have been disabled
within the first 60 days of COBRA coverage must notify the plan administrator
of this determination to be eligible for the additional 11 months of coverage.
They must provide this notice within 60 days of receiving the SSA’s decision.
(Relatedly, these beneficiaries must also provide notice if they are subsequently
determined by the SSA to no longer be disabled. They must notify the plan
administrator within 30 days of receiving such determination.)

22 For more information on working Medicare beneficiaries, see Center for Medicare and Medicaid Services, Medicare
and Other Health Benefits: Your Guide to Who Pays First, August 2020, at https://www.medicare.gov/Pubs/pdf/02179-
medicare-coordination-benefits-payer.pdf; and U.S. Social Security Administration, Medicare and COBRA, at
http://www.socialsecurity.gov/disabilityresearch/wi/medicare.htm#cobra.
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 Within 14 days of receiving notice of a qualifying event, the plan administrator
must notify, in writing, each covered employee (and qualified spouse/dependent)
of the employee’s right to elect COBRA continuation coverage.
The timelines for the notices described in the last three bullets were temporarily extended in
response to the COVID-19 pandemic. Specifical y, since March 1, 2020, no days are to count
toward the timelines until the earlier of (1) one year from the date the beneficiary or entity was
first eligible for the timeline relief or (2) 60 days after an announced end of the COVID-19
national emergency (or another date specified by the IRS and Employee Benefits Security
Administration).23
Election of Coverage
A qualified individual must choose whether to elect COBRA coverage within an election period.
This period is (at least) 60 days from the later of two dates: the date coverage would be lost due to
the qualifying event or the date that the beneficiary is provided notice of the beneficiary’s right to
elect COBRA coverage. For those individuals who become eligible for COBRA after March 1,
2020, no days are to count toward this timeline until the earlier of: (1) the date the beneficiary
was first eligible for the timeline relief, or (2) 60 days after an announced end of the COVID-19
national emergency (or another date specified by the IRS and Employee Benefits Security
Administration).24
If electing COBRA coverage, the beneficiary must provide the employer or plan administrator
with a formal notice of election. Coverage is retroactive to the date of the qualifying event. The
employee or other affected person may also waive COBRA coverage. If an individual waives
COBRA coverage, the individual may subsequently revoke the waiver and elect COBRA
coverage, provided such activity is within the election period. In this instance, COBRA coverage
must stil be provided, but coverage could begin on the date of the revocation rather than the date
of the qualifying event.
The Trade Act of 2002 (P.L. 107-210) provided a second election period for certain Trade
Adjustment Assistance (TAA) Program participants.25 Under the provision, qualified individuals
who did not elect COBRA coverage during the regular election period can elect continuation
coverage within the first 60-day period beginning on the first day of the month when they were

23 T he COVID-19 national emergency refers to the “Proclamation on Declaring a National Emergency Concerning the
Novel Coronavirus Disease (COVID-19) Outbreak,” issued on March 13, 2020 (see
https://trumpwhitehouse.archives.gov/presidential-actions/proclamation-declaring-national-emergency-concerning-
novel-coronavirus-disease-covid-19-outbreak/). See also Federal Register and Disaster Relief Notice for examples on
how the relief applies: 85 Federal Register 26351; and Department of Labor, Employee Benefits Security
Administration, EBSA Disaster Relief Notice 2021- 01, “ Guidance on Continuation of Relief for Employee Benefit
Plans and Plan Participants and Beneficiaries Due to the COVID-19 (Novel Coronavirus) Outbreak,” at
https://www.dol.gov/sites/dolgov/files/ebsa/employers-and-advisers/plan-administration-and-compliance/disaster-
relief/ebsa-disaster-relief-notice-2021-01.pdf.
24 85 Federal Register 26351 and Department of Labor, Employee Benefits Security Administration, EBSA Disaster
Relief Notice 2021- 01, Guidance on Continuation of Relief for Employee Benefit Plans and Plan Participants and
Beneficiaries Due to the COVID-19 (Novel Coronavirus) Outbreak, https://www.dol.gov/sites/dolgov/files/ebsa/
employers-and-advisers/plan-administration-and-compliance/disaster-relief/ebsa-disaster-relief-notice-2021-01.pdf.
25 T rade Adjustment Assistance (T AA) Program participants may be eligible for the Health Coverage T ax Credit and
could claim the credit to help cover the costs of COBRA continuation coverage. For more information on this issue, see
CRS Report R44392, The Health Coverage Tax Credit (HCTC): In Brief.
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Health Insurance Continuation Coverage Under COBRA

determined to have become TAA-eligible. This COBRA election cannot be made later than six
months after the date the TAA-related coverage was lost.
As a result of the ARPA, individuals who became eligible for COBRA continuation coverage as a
result of a reduction in hours or involuntary termination before April 1, 2021, and who did not
initial y elect COBRA coverage (or who initial y elected coverage and subsequently discontinued
coverage before April 1) were al owed a second opportunity to enroll in COBRA coverage (if
eligible).26 Individuals provided the second election period should have received a notice
informing them of this opportunity prior to May 31, 2021. These individuals then could have
elected COBRA continuation coverage during the 60 days after they were provided the notice.
Under this second election, the COBRA continuation coverage would have begun with the first
coverage period that begins on or after April 1 and would not extend beyond the period of
COBRA continuation coverage for which the individual is eligible. The aforementioned timeline
relief provided during the COVID-19 national emergency does not apply to these 60-day notice
or election periods.27
Paying for COBRA
Some individuals currently do not have to pay any premium amounts to enroll in COBRA
coverage provided from April 1, 2021, through September 30, 2021. This assistance was included
as part of the ARPA, which provided a 100% premium subsidy of COBRA continuation coverage
in certain instances. As such, eligible individuals are not required to pay any premium amounts,
or administrative fee amounts, for COBRA coverage during this period. For more information on
the ARPA COBRA premium assistance, see the text box below.
Absent the ARPA premium assistance, employers are not required to cover the cost of COBRA
coverage. They are permitted to charge the covered beneficiary 100% of the premium (both the
portion paid by the employee and the portion paid by the employer, if any), plus an additional 2%
administrative fee. For disabled individuals who qualify for an additional 11 months of COBRA
coverage, the employer may charge up to 150% of the premium for these additional months.
For context, the Agency for Healthcare Research and Quality Medical Expenditure Panel Survey
provides estimates for the average health insurance premiums among private-sector employers. In
2019, the average annual premium for employer-sponsored health insurance was $6,972 for
single coverage and $20,486 for family coverage.28 Covered, current employees contributed on
average 17% of the premium for single coverage and 27% of the premium for family coverage.
As such, paying up to 102% of the premium may be a financial hardship for newly unemployed

26 T his secondary election period may overlap with the first election period and does not preclude an individual from
their ability to elect COBRA coverage under t he first election period. T he election period that an individual elects
COBRA continuation coverage under impacts their ability to receive the premium assistance and potentially, the start
date of the coverage. For a discussion on these issues, see Department of Labor, FAQs about COBRA Prem ium
Assistance under the Am erican Rescue Plan Act of 2021 , April 7, 2021, https://www.dol.gov/sites/dolgov/files/EBSA/
about-ebsa/our-activities/resource-center/faqs/cobra-premium-assistance-under-arp.pdf.
27 Department of Labor, FAQs About COBRA Premium Assistance Under the American Rescue Plan Act of 2021, April
7, 2021, at https://www.dol.gov/sites/dolgov/files/EBSA/about -ebsa/our-activities/resource-center/faqs/cobra-premium-
assistance-under-arp.pdf.
28 Agency for Healthcare Research and Quality (AHRQ), MEPS Insurance Component Chartbook 2019, AHRQ
Publication No. 20(21)-0052 , October 2020, p. 13, at https://www.meps.ahrq.gov/data_files/publications/cb24/
cb24.pdf.
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Health Insurance Continuation Coverage Under COBRA

individuals, and these individuals may seek another type of coverage (e.g., a spouse’s employer-
sponsored coverage, individual market coverage, Medicaid) or go uninsured.29
The American Rescue Plan Act of 2021 COBRA Premium Assistance
The American Rescue Plan Act of 2021 (ARPA; P.L. 117-2) temporarily subsidizes continuation coverage for
certain COBRA-eligible individuals and includes provisions that reimburse employers (or, in some instances,
multiemployer plans or insurers) the unpaid premium amounts through a refundable payrol tax credit.
The ARPA provides eligible individuals with a 100% premium subsidy of COBRA coverage from April 1, 2021,
through September 30, 2021. As such, eligible individuals are not required to pay any premium amounts, or
administrative fee amounts, for COBRA coverage during this period. Individuals general y are eligible for the
COBRA premium assistance if they become eligible for COBRA coverage as a result of an involuntary termination
or reduction in hours and elect COBRA coverage. In addition, to be eligible for the premium assistance, the
individual’s employer must be subject to federal COBRA requirements (i.e., private-sector or state and local
government requirements) or “comparable” state continuation coverage requirements. Although the assistance is
available through September 30, 2021, in some instances, the COBRA premium assistance may end earlier for
certain individuals. For example, COBRA premium assistance wil end early for those who reach their maximum
COBRA coverage period prior to September 30, 2021.
General y, employers are initial y required to cover the costs of providing this subsidized COBRA coverag e but
are able to offset these costs via a refundable payrol tax credit. In many situations, employers would claim this
credit quarterly, though the credit (including any refundable portion) is al owed to be paid to the employer in
advance up to the amount calculated through the end of the most recent payrol period in the quarter. In
instances where there is a multiemployer plan, the multiemployer plan initial y covers the cost and wil claim the
payrol tax credit. In instances where employers purchase ful y insured plans, the insurer providing the plan is to
initial y cover the cost and claim the credit.
For more information on the ARPA COBRA premium assistance, see CRS Insight IN11643, The American Rescue
Plan Act of 2021 (ARPA; P.L. 117-2) COBRA Premium Assistance, and “Section 9501: Preserving Health Benefits for
Workers” in CRS Report R46777, American Rescue Plan Act of 2021 (P.L. 117-2): Private Health Insurance, Medicaid,
CHIP, and Medicare Provisions.
Notes: The ARPA COBRA premium assistance is similar, though not identical to, the COBRA premium
assistance that Congress previously established Congress in Title III of Division B of the American Recovery
and Reinvestment Act (ARRA, as amended; P.L. 111-5). The ARRA COBRA premium assistance provided up
to 15 months of COBRA premium subsidies to certain individuals who enrol ed in COBRA coverage after
experiencing an involuntary termination on or after September 1, 2008, and through May 31, 2010. Individuals
who received the subsidy were required to pay no more than 35% of their COBRA premiums. As such, these
individuals received a 65% COBRA premium subsidy. General y, the employer providing the subsidized
COBRA continuation coverage would have been reimbursed the remaining 65% of the premium for the
COBRA continuation coverage through a credit against its payrol taxes. In some instances, a multiemployer
plan or the insurer would have been al owed the credit.
Once an individual elects COBRA coverage, the plan cannot require the individual to pay any
premiums within the first 45 days after the election of coverage. The plan must al ow a qualified
beneficiary to pay for the coverage in monthly instal ments, although alternative intervals may
also be offered. As mentioned above, employers may terminate the COBRA coverage on the first
day for which timely payment of the premium is not made (payment is timely if it is made within
30 days of the payment due date).

29 For information on some of these other coverage types, see CRS In Focus IF11523, Health Insurance Options
Following Loss of Em ploym ent.
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The 45-day and 30-day timelines associated with premium payments were extended in response
to the COVID-19 pandemic.30 Specifical y, after March 1, 2020, no days are to count toward
these timelines until the earlier of (1) one year from the date the individual was first eligible for
timeline relief or (2) 60 days after an announced end of the COVID-19 national emergency (or
another date specified by the IRS and Employee Benefits Security Administration).
For example, if a COBRA beneficiary were required to pay COBRA premiums on February 15,
2021, and March 15, 2021, and failed to do so, the beneficiary’s payments for February and
March stil would be considered timely if made within the 30 days after the earlier of (1) one year
from the date the beneficiary was first eligible for relief or (2) 60 days after an announced end of
the COVID-19 national emergency (or another date specified by the IRS and Employee Benefits
Security Administration). This beneficiary’s employer stil would be required to cover the
beneficiary during February and March, even though premiums may not be collected until after
the COVID-19 national emergency. In the event that the beneficiary subsequently did not make a
timely premium payment (after accounting for the extension), the employer would be obligated to
cover the beneficiary only during the period that the beneficiary made timely payments. Building
off the aforementioned example, if the beneficiary made a timely payment after the relief for
February but not March, the employer would not be obligated to cover the beneficiary in March.
Penalties for Noncompliance
In general, employers are subject to an IRS excise tax for each violation involving a COBRA
beneficiary, and the tax is $100 per day per beneficiary for each day of the period of
noncompliance.31 ERISA also al ows beneficiaries to bring civil action against plan
administrators that fail to provide beneficiaries with required COBRA notifications (see “Notice
Requirements”).32 In this instance, a court may find plan administrators liable for each violation
up to $110 per day per beneficiary.

Author Information

Ryan J. Rosso

Analyst in Health Care Financing

30 85 Federal Register 26351 and Department of Labor, Employee Benefits Security Administration, EBSA Disaster
Relief Notice 2021- 01, “ Guidance on Continuation of Relief for Employee Benefit Plans and Plan Participants and
Beneficiaries Due to the COVID-19 (Novel Coronavirus) Outbreak,” at https://www.dol.gov/sites/dolgov/files/ebsa/
employers-and-advisers/plan-administration-and-compliance/disaster-relief/ebsa-disaster-relief-notice-2021-01.pdf.
31 In some instances, this excise tax may fall on the plan (in the case of a multiemployer plan) instead of the employer.
Additionally, other entities (e.g., the insurer of the plan, the third-party administer administering claims under the plan)
may also be subject to this excise tax if such entity is responsible for performing the violating a ct.
32 State and local plans covered under the Public Health Service Act are not subject to the same financial penalties
provided under the tax code or ERISA. However, state and local employees have the right to bring an “action for
appropriate equitable relief” if they are “ aggrieved by the failure of a state, political subdivision, or agency or
instrumentality thereof” to provide continuation health insurance coverage, as required under the act. Public Health
Service Act; 42 U.S.C. §300bb–1.
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Health Insurance Continuation Coverage Under COBRA

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
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copy or otherwise use copyrighted material.

Congressional Research Service
R40142 · VERSION 22 · UPDATED
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