COBRA Rights in Texas: Continuing Health Insurance After Job Loss

The Consolidated Omnibus Budget Reconciliation Act (COBRA), enacted in 1985 and codified at 29 U.S.C. § 1161, provides continuation health coverage to workers and their families who lose employer-sponsored insurance due to certain qualifying events. COBRA applies to private sector employers with 20 or more employees on 50% of business days in the prior year, as well as some state and local government employers.

Coverage under COBRA extends for 18 months for job loss or reduction in hours; 29 months for individuals who were disabled at the time of job loss; and 36 months for spouses, ex-spouses, and dependent children following death of the employee, divorce, or loss of dependent status. The law covers the same health insurance plans offered to active employees, including medical, dental, and vision where applicable.

Employees must be notified of COBRA rights within 14 days of a qualifying event. The worker has 60 days from losing coverage or receiving notice—whichever is later—to elect COBRA continuation. During COBRA coverage, the employee pays the full premium rate plus up to 2% administrative fee. The Department of Labor enforces COBRA for private-sector plans, while the IRS administers tax-related penalties. Employers who fail to provide COBRA notices or improperly terminate coverage face penalties up to $300 per day per employee.

Texas does not impose additional COBRA requirements beyond federal law, as COBRA itself is a federal statute that preempts state insurance regulation in this area. However, Texas Insurance Code § 1251.001 et seq. establishes state rules for health benefit plan continuation that align with COBRA minimums.

Under Texas law, group health plans must provide continuation coverage at the same terms as offered to active employees. Texas requires insurers to notify covered individuals of continuation rights within 14 days of a qualifying event, matching the federal deadline. Texas does not extend COBRA-like continuation beyond federal COBRA timeframes—employers with fewer than 20 employees are not required to offer continuation coverage under state law unless they voluntarily do so.

Texas employers are subject to federal COBRA enforcement through the Department of Labor and IRS, not state agencies. The Texas Department of Insurance oversees group health plan compliance with state insurance laws but has no independent jurisdiction over COBRA administration. If a Texas employer fails to provide COBRA notice or improperly denies continuation, the worker may file a complaint with the U.S. Department of Labor's Employee Benefits Security Administration (EBSA), not with a Texas state agency.

Texas workers have the same federal COBRA rights regardless of state residence; there are no Texas-specific enhancements to COBRA coverage duration, premium caps, or qualifying events. Workers should understand that COBRA is their only right to continuation coverage in Texas—there is no state-mandated extension beyond the federal 18 to 29-month periods.

COBRA does not apply to employers with fewer than 20 employees; these workers have no federal continuation right and must rely on state insurance conversion rules or purchase individual coverage. Federal, state, and local government employees are not covered by COBRA; they are governed by separate ERISA rules and the Federal Employees Health Benefits Program (FEHB). Military personnel losing ERISA coverage may use TRICARE instead of COBRA.

COBRA applies only to group health plans; it does not require continuation of life insurance, disability coverage, or other welfare benefits. If an employer terminates its entire group health plan—not just an individual's participation—COBRA rights may be limited or eliminated, though notice requirements still apply.

Qualifying events for COBRA are strictly defined and include involuntary job loss, voluntary resignation (which does not trigger COBRA), reduction in hours, death of employee, divorce or legal separation, loss of dependent child status, and coverage of a disabled dependent. Termination for gross misconduct is the only grounds for denying COBRA to an otherwise eligible employee, and the employer must provide specific written notice citing misconduct.

You cannot elect COBRA retroactively if you wait longer than 60 days after losing coverage or receiving notice. Gaps in coverage are not covered. If you fail to pay COBRA premiums when due, coverage may terminate—typically 30 days after a missed payment, though the employer must provide written notice of nonpayment before terminating.

COBRA is not available if the employee was never enrolled in the employer's group health plan at the time of termination. Part-time or seasonal workers must have been covered under the plan to have COBRA rights. Medicare-eligible individuals may find COBRA coverage duplicative or expensive and should compare it to Medicare options.

Step 1 — Document Your Coverage and Termination: Obtain copies of your last health insurance ID card, the summary plan description (SPD), your termination letter, and any communications from your employer regarding benefits. Save emails, texts, and letters discussing your employment end date and insurance status. Note the exact date you lost coverage. Take screenshots of any employer benefits portal information about your plan. Keep records of all premium payments made while employed.

Step 2 — Request COBRA Notice from Your Employer or Plan Administrator: Within 14 days of your termination or qualifying event, contact your employer's HR department and the health plan administrator (listed on your insurance card) in writing, requesting your formal COBRA election notice. Send this via certified mail with return receipt. The employer or plan must provide you a COBRA election notice within 14 days if they have not already done so. If you do not receive notice within 14 days, document the failure—this is a COBRA violation. Attempt to obtain the notice before the 60-day election deadline expires.

Step 3 — File a COBRA Election Within 60 Days: You have 60 days from the date you lose coverage or receive COBRA notice—whichever is later—to elect COBRA in writing. Complete the COBRA election form provided by the plan administrator. Mail it via certified mail to the address specified in your COBRA notice. Include your full name, address, date of birth, employee ID, and the date of the qualifying event. Keep a copy for your records and the return receipt from certified mail. If 60 days pass without election, you lose your COBRA right permanently and must purchase individual insurance.

Step 4 — Make Your First Premium Payment: COBRA premiums are due within 45 days of electing COBRA (30 days according to some plans; check your notice). You must pay 100% of the premium—typically $600–$1,500+ per month for family coverage depending on the plan—plus up to 2% administrative fee. The plan administrator will provide a payment invoice and instructions. Pay by the due date; late payment can result in termination of coverage. If you cannot afford the full premium, investigate whether you qualify for a subsidy through the Healthcare.gov marketplace or Medicaid (Texas has limited Medicaid, but check eligibility).

Step 5 — Consult an Attorney if Coverage Is Improperly Denied or Terminated: If the employer fails to provide COBRA notice, denies your election without stating gross misconduct, or improperly terminates your coverage, file a complaint with the U.S. Department of Labor, Employee Benefits Security Administration (EBSA) at www.dol.gov/agencies/ebsa. Include your name, the employer name, dates of employment and coverage loss, and a description of the violation. You do not need an attorney to file, and there is no filing fee.

If the employer terminated you for claimed gross misconduct and denied COBRA, consult an employment attorney to review whether the stated reason is pretextual (a cover for discrimination or retaliation). Attorneys can also pursue claims for unpaid premiums, denial of benefits while COBRA was in effect, and penalties under ERISA § 502(c). Many employment law firms handle COBRA disputes on a contingency basis if the employer's violation is clear. Contact the State Bar of Texas for referrals to ERISA-experienced attorneys.