COBRA Rights in Washington: Continuing Health Insurance After Job Loss

The Consolidated Omnibus Budget Reconciliation Act (COBRA), codified at 29 U.S.C. § 1161 et seq., requires group health plans maintained by employers with 20 or more employees to offer continuation coverage to employees and their dependents upon the occurrence of a qualifying event. Qualifying events include termination of employment (whether voluntary or involuntary), reduction in work hours, death of the employee, divorce or legal separation, and a dependent child aging out of coverage. The law covers health insurance, dental, vision, and prescription drug coverage if included in the plan.

Employers covered by COBRA must provide written notice of continuation rights within 14 days of a qualifying event. The employee then has 60 days from the date of the qualifying event to elect COBRA coverage. The continuation period is 18 months for termination or reduction in hours, 36 months for death, divorce, or dependent age-out, and 29 months if the employee is deemed disabled by the Social Security Administration during the first 60 days of coverage. The employee must pay the entire premium (the employer's share plus the employee's share) plus a 2% administrative fee. The EEOC enforces COBRA for violations, and violations may also result in excise taxes of up to $100 per day per individual under 26 U.S.C. § 4980B. State and local governmental plans are exempt from COBRA; such employees typically have state continuation coverage rights under separate state law.

Washington does not have its own state-specific COBRA law or continuation coverage statute that is broader or more generous than federal COBRA. Washington employees are subject only to federal COBRA protections. However, Washington has unique characteristics that affect COBRA eligibility and administration: First, Washington is a state where many health plans are purchased through the Washington Health Plan Finder (the state's health insurance marketplace established under the Affordable Care Act), but COBRA rights remain governed by federal law, not state marketplace rules.

Second, Washington state law does not require employers to offer health insurance, nor does it regulate the content or cost of plans offered, so the decision to offer COBRA continuation coverage is purely a matter of federal COBRA compliance for employers with 20+ employees. Employers with fewer than 20 employees are not required by any Washington or federal law to offer continuation coverage.

Third, Washington is not a continuation coverage state under any state-specific statute. Unlike some states that have enacted mini-COBRA laws (short-term continuation coverage for smaller employers or specific industries), Washington has no such law. Washington employees whose employers do not meet the 20-employee threshold may only pursue alternatives such as marketplace coverage, spousal coverage, COBRA through a former spouse's employer, or temporary coverage under ACA transitional rules.

Fourth, Washington's Public Employees Retirement System (PERS) and other public employee plans may have continuation coverage rules set by state statute rather than COBRA, but private sector employees are covered exclusively by federal COBRA. The remedies available under federal COBRA apply: the employee may sue to enforce election rights, and the employer may face an excise tax of up to $100 per day per individual for failure to provide required notices or continuation coverage.

COBRA does not apply to employers with fewer than 20 employees, so Washington residents employed by small businesses have no federal COBRA rights and must seek marketplace coverage or other alternatives. Employers are exempt from providing COBRA if they cease offering group health insurance to all employees, though any employees on COBRA continuation have the right to pay into any plan offered to active employees at the same rate. Qualifying events do not include voluntary resignation without more; the employee must lose eligibility for the plan due to job loss, reduction in hours, or one of the statutory events. An employee terminated for gross misconduct may be required to pay a higher premium (up to 150% of the plan rate) instead of 102%, though this exception is narrowly construed and rarely applied. Coverage terminates before 18 months if the employee becomes enrolled in another group health plan with no pre-existing condition exclusions, becomes enrolled in Medicare, or fails to pay the required premium. Self-employed individuals and independent contractors are not covered by COBRA; only employees are eligible. COBRA continuation is not available through the Washington Health Plan Finder or state marketplace; it must be administered through the employer's plan.

Washington's at-will employment doctrine does not affect COBRA rights—an employee terminated for any reason (lawful or not) retains COBRA eligibility, though wrongful termination claims are separate from COBRA claims. Union employees may have additional continuation coverage rights negotiated in a collective bargaining agreement, which may be more generous than COBRA; in such cases, the union agreement controls. Domestic partners in Washington are not automatically entitled to coverage under an employee's group health plan unless the plan specifically includes them, which affects COBRA eligibility for domestic partners. Federal employees are covered by separate continuation rules (the Federal Employees Health Benefits (FEHB) program) and not by COBRA.

Step 1: Document the qualifying event. Keep a copy of your termination letter, final paycheck, or any notice of reduction in hours. If you were covered by a group health plan at the time of the event, gather your plan documents (summary plan description, formulary, benefit statements). Record the date of the qualifying event, which starts the 60-day election period. Keep copies of all communications with your employer or former employer, including email, letters, or benefit forms.

Step 2: Request and review the COBRA election notice. Your employer or the plan administrator must send you a COBRA notice within 14 days of the qualifying event. If you do not receive one, contact your former employer's HR or benefits department directly in writing (email is acceptable) and ask for the COBRA election notice and plan documents. Request a written confirmation that your notice was received. Do not assume the notice was sent if you did not receive it; follow up in writing.

Step 3: File with the correct agency if the employer fails to provide notice. If you do not receive a COBRA notice within 14 days of your qualifying event, you can file a complaint with the U.S. Department of Labor (DOL) Employee Benefits Security Administration (EBSA). Visit www.dol.gov/agencies/ebsa and use the "File a Complaint" tool. You will need to provide: your name, contact information, employer name and address, date of job loss or qualifying event, name of the health plan, and a description of what notice or coverage you did not receive. The deadline to file a complaint is generally 6 years from the violation. You may also contact the DOL EBSA hotline at 1-866-444-EBSA (3272).

Step 4: Understand the investigation and election process. Once you submit a complaint or request COBRA, the plan administrator will send you an official COBRA election notice (if not already sent). You will have 60 days from the date of the qualifying event to return a completed election form and make your first premium payment (typically 102% of the employer's group rate). The plan administrator will then provide you with evidence of coverage, payment instructions, and renewal deadlines. Expect the investigation to take 30–60 days if you filed with the DOL; the EBSA will contact the employer and request plan documents and notice records. The plan must provide coverage within 30 days of your election (no later than the deadline if you elect on time).

Step 5: Consult an attorney if the employer violates your COBRA rights. Contact an employment law attorney licensed in Washington if: (a) the plan fails to provide continuation coverage after you properly elected COBRA and paid the premium; (b) the plan terminates your coverage early without cause; (c) the plan requires you to pay more than 102% of the group rate without a disability exception; or (d) you filed a DOL complaint and the employer retaliated against you or refused to comply. An employment attorney can review your plan documents, send a demand letter, and file a lawsuit under ERISA (Employee Retirement Income Security Act), 29 U.S.C. § 1132, to recover unpaid benefits, attorney fees, and court costs. You do not need to exhaust the plan's internal appeal process before suing if the violation is clear. Contact the Washington State Bar Association at 206-727-8200 or visit www.wsba.org for a referral to an ERISA or employment law specialist.