COBRA Rules for Employers With Fewer Than 20 Employees
No. Federal COBRA applies only to employers with 20 or more employees on at least 50 percent of their typical business days in the previous calendar year. Employers with fewer than 20 employees are not required under federal law to offer COBRA. However, many states have Mini-COBRA laws that require smaller employers to provide continuation coverage. These rules vary by state and may have different timeframes and requirements than federal COBRA.
Employer Responsibilities for Small Businesses
When an employee loses group health insurance, federal COBRA law requires employers with 20 or more employees to offer continuation coverage. Small businesses with fewer than 20 employees are not required to provide COBRA, but many states have Mini-COBRA laws that apply to smaller employers.
Business owners should review state or local laws to understand whether they must provide continuation coverage and what notice requirements apply. If coverage is required, the employer or a third-party administrator must notify the employee of their right to continue benefits and collect the full premium payment from the former employee.
For Employers: Guide to COBRA Insurance