The COBRA Blog

Mini COBRA Requirements Create Major Headache

Posted by Robert Meyers on Tue, May 29, 2012 @ 12:05 PM

The administration of health benefits is likely one of your biggest headaches, and it’s vital to keep yourself informed and up to date on the changing laws and compliance requirements.

While federal COBRA laws have been around for awhile and are familiar to everyone, some employers are unaware that many states now have similar laws applying to smaller businesses with fewer than 20 employees. Often referred to as mini COBRA, these laws extend notice requirements and penalties to small employers.

Since January 2010, more than 40 states have enacted mini COBRA laws to help workers in businesses with fewer than 20 workers continue their health coverage if they lose their jobs. These state continuation laws require small group health plans to provide continued coverage to unemployed workers as long as they pay both the employer and employee share of the premium.

How is mini COBRA different from federal COBRA?

In some states, mini COBRA laws mirror the federal COBRA law. In other states, they provide shorter periods of continued coverage or fewer benefits. Coverage under these state continuation programs often differ in duration, restrictions, and eligibility from the coverage provided to workers under the federal law. But keep in mind that federal COBRA law has a preemptive clause and generally overrides state law, so federal rules should be followed first and state rules followed second. Unfortunately, the two laws don’t always mesh very well making administration difficult.

Since smaller employers generally aren’t affected by federal COBRA laws, many are unaware of these changes in the law and are unaccustomed to handling the complex and time intensive administrative functions necessary to comply with either state or federal COBRA laws. Adding to the confusion is the fact that state COBRA laws and compliance requirements haven’t been widely published.

So how do you get a handle on mini COBRA laws and make sure you’re in compliance with your state’s requirements? The best place to start is your state's Department of Insurance. They can help you sort out the complexities of the law as it applies to your state and your situation. For a quick overview of state requirements, visit

Arming yourself with information is vital to navigating COBRA and understanding how the law applies to your situation. Here are three steps you can take to make sure you’re in compliance: 

  • Consult your state’s Department of Insurance to learn about the mini COBRA requirements applicable to your state. 
  • Make sure you have a current Summary Plan Description (SPD) that reflects the continuation provisions in effect for your state or federal COBRA, whichever is applicable. 
  • If you use a COBRA administrator to comply with federal requirements, see if there's also a system in place for complying with any applicable state COBRA compliance requirements. These requirements generally apply in addition to federal COBRA compliance requirements, if the requirements go beyond federal COBRA. Again, federal requirements generally preempt state requirements.

If you lack the HR resources to handle these administrative tasks or have major layoffs in the works, it may be a good idea to consider outsourcing your COBRA administration. But whether you handle these tasks in house or outsource, by keeping yourself informed and prepared you can avoid expensive oversights and help control your health benefits costs. And that’s always good for the bottom line.


Tags: COBRA compliance, mini COBRA laws, state COBRA, mini COBRA

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