Mini-COBRA (State Continuation)

Mini-COBRA is the name for state laws that give employees of small employers the right to keep their group health coverage for a while after leaving a job. Federal COBRA only applies to employers with 20 or more employees, so about 40 states passed their own versions to cover the smaller groups federal law skips.

The details vary a lot by state. Texas allows up to nine months of continuation for employees of small fully-insured groups, and then adds a separate six-month state continuation right that can follow federal COBRA. New York allows 36 months. Some states cover only fully-insured plans, because states can't regulate self-funded ERISA plans; a self-funded employer with 15 employees may owe no continuation at all. The former employee pays the full premium, sometimes plus a small administrative fee, which for family coverage can mean $1,800 a month or more. For many people, a marketplace plan with a premium subsidy ends up cheaper than continuing the old group plan.

The takeaway: if you leave a small employer, ask two questions before you sign anything: does state continuation apply to this plan, and what would the same coverage cost on the marketplace? Compare both before the election deadline.