Employer group health coverage (federal requirements)
A guide to employer group health coverage (federal requirements): what it covers, what it excludes, what actually goes wrong, what reduces it, and what an underwriter asks. Every statement cites a published source.
Overview
What this line is, and who or what it is designed to protect.
Not a policy form so much as a set of federal obligations that attach to one. Two bodies of law do most of the work: the continuation rules that let a person keep group coverage after they would otherwise lose it, and the shared responsibility rules that decide which employers must offer coverage at all. Both are statute, so unlike most lines the governing text can be read in full. A person losing coverage generally has at least 60 days to elect continuation [3], and the plan may charge no more than 102 percent of the applicable premium for it [1].
A covered employee and their qualified beneficiaries against losing group coverage on the date a qualifying event occurs, by giving a right to continue it [1]
A spouse after divorce or legal separation, and a child who ceases to be a dependent, both of which are qualifying events in their own right [2]
A retiree whose former employer enters a title 11 proceeding, which is a qualifying event reaching a substantial elimination of coverage within a year either side of commencement [2]
Not the employer from the obligation. Nothing here is optional for a plan that is subject to it
What it covers
Each note carries a policy-form caveat, because what a form covers is read in that form.
Continuation after termination or reduced hours, for 18 months
Section 1162(2)(A)(i) sets the maximum period at the date which is 18 months after the qualifying event, for a termination or a reduction of hours [1].
Continuation for 36 months after the other qualifying events
Section 1162(2)(A)(iv) sets the maximum at 36 months after the date of the qualifying event for events other than termination or reduction of hours [1].
An extension to 29 months on disability
Where a qualified beneficiary is determined disabled during the first 60 days of continuation and proper notice is given before the 18 months end, the reference to 18 months is deemed a reference to 29 months with respect to all qualified beneficiaries [1].
Six qualifying events, named in the statute
Death of the covered employee; termination other than for gross misconduct, or reduction of hours; divorce or legal separation; the employee becoming entitled to Medicare benefits; a dependent child ceasing to qualify; and a title 11 proceeding with respect to the employer [2].
An election period of at least 60 days
It begins not later than the date coverage terminates by reason of the qualifying event, runs at least 60 days, and ends not earlier than 60 days after the later of that date or the date of the notice under section 1166(4) [3].
What it excludes
Exclusions and limitations as the published forms state them.
Termination for gross misconduct
The qualifying event in section 1163(2) is a termination other than by reason of the employee's gross misconduct, so a termination on that ground is outside the list entirely [2].
Any obligation on the employer to subsidise the continued coverage
The plan may require payment of a premium not exceeding 102 percent of the applicable premium [1]. The right is to keep the coverage, at a cost that now falls on the individual.
A duty on the employer to report the two personal events
For divorce or legal separation and for a child ceasing to be a dependent, the covered employee or qualified beneficiary is responsible for notifying the administrator within 60 days [4]. An employer has no way of knowing about either.
Employers below the applicable large employer threshold, for shared responsibility
The shared responsibility rules apply to an employer who employed an average of at least 50 full-time employees on business days during the preceding calendar year [5].
What goes wrong
The loss drivers, as distinct from what the policy protects. This is the question an underwriter is asking.
A notice chain with three links and three clocks
The employer has 30 days to notify the administrator of a death, termination or reduction of hours, Medicare entitlement or title 11 proceeding; the administrator then has 14 days to notify the qualified beneficiary [4]. A delay anywhere in that chain is an exposure for whoever caused it.
A late notice that extends rather than forfeits the right
The election period ends not earlier than 60 days after the later of coverage terminating and the notice arriving [3]. Giving notice late does not close the window early; it moves it, and the plan carries the coverage in the meantime.
Becoming an applicable large employer without noticing
The test is an average over the preceding calendar year, and part-time hours count through the divide-by-120 rule [5]. An employer can cross the line without ever having 50 people on the payroll at one time.
Asserting gross misconduct
It is the only conduct-based carve-out in the qualifying event list [2], and treating a termination as outside continuation on that basis decides someone's health coverage on a contested characterisation.
What reduces it
Things you can do, each tied to a source. None of these is a promise about price; whether an insurer credits any of them is an underwriting decision.
Write down the procedure for the events individuals must report
The statute places divorce, legal separation and a child ceasing to be a dependent on the individual within 60 days [4], so whether anyone knows how to report is a plan administration question rather than a statutory one.
Keep proof of when each notice was sent
Because the election period ends not earlier than 60 days after the later of termination and the notice [3], the notice date is what fixes the deadline, and it is the employer or administrator who has to be able to show it.
Recount the workforce on the statutory basis each year
Average full-time employees over the preceding calendar year, plus non-full-time hours divided by 120, against a full-time test of 30 hours of service per week [5].
Do not require payment inside the 45 day window
No premium may be required before the day which is 45 days after the initial election [1], which matters most to the person who has just lost their income alongside their coverage.
Underwriting
Information commonly requested. Common practice rather than a filed requirement.
The average number of full-time employees over the preceding calendar year, which decides applicable large employer status [5]
Aggregate hours of service of employees who are not full-time, since those are converted by dividing by 120 [5]
Whether any employee averages at least 30 hours of service per week, which is the full-time test [5]
Whether the plan is a multiemployer plan, which can lengthen the statutory notice periods [4]
Who administers the plan, since the 14 day notice duty sits on the administrator [4]
Whether written notice procedures exist for the events the individual must report [4]
The date of any qualifying event, since every period in these sections runs from it [2]
Limits and endorsements
How the limit is structured, and the endorsements that change it.
There is no limit structure here in the property sense. The numbers that govern are periods and thresholds.
18 months for a termination or reduction of hours, and 36 months for the other qualifying events [1].
29 months where the disability extension applies, and it applies with respect to all qualified beneficiaries rather than only the disabled one [1].
102 percent of the applicable premium is the ceiling on what the plan may charge, payable in monthly installments at the election of the payor [1].
No premium may be required before the day which is 45 days after the day the qualified beneficiary made the initial election [1].
An average of at least 50 full-time employees over the preceding calendar year makes an employer an applicable large employer, counting part-time hours by dividing aggregate non-full-time hours of service for a month by 120 [5].
Full-time means employed on average at least 30 hours of service per week for the month [5].
State continuation, where it applies
Several states extend continuation to employers below the federal threshold or lengthen the federal period. That is state law and is not described by the federal sections cited here.
The plan document and summary plan description
The statutory floor is a floor. A multiemployer plan may provide longer notice periods than the 30 and 14 day defaults, which the statute expressly permits in its own terms [4].
By state
Where a state changes the answer. Only the states read for this page appear.
CA
The sections cited here are federal and apply the same way in every state. California and several others add their own continuation requirements on top, including for employers below the federal threshold, and those are state law not described by these records [5].
Source ledger
Every numbered marker in this guide resolves to a record below. Each record lists the exact claims it supports, and each claim has its own address.
Source ledger
9 sources. Every citation number above resolves to a record below. Nothing here sits behind an account.
- [1]29 U.S.C. 1162 (COBRA continuation coverage: the period, and what the plan may charge)(opens the original record on Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov))Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov)Primary lawPrimaryJurisdiction USLast checked September 6, 2026Updates: Amended only by legislation.ID
usc-29-1162-continuation-periodWhat this source supports (5)
- Section 1162(2)(A)(i) sets the maximum period of continuation coverage, for a qualifying event that is a termination or reduction of hours, at the date which is 18 months after the date of the qualifying event.
- Section 1162(2)(A)(iv) sets the maximum period, for other qualifying events, at the date which is 36 months after the date of the qualifying event.
- Section 1162(2)(A)(viii) provides that where a qualified beneficiary is determined to be disabled during the first 60 days of continuation coverage and proper notice is given before the end of the 18 months, any reference in clause (i) or (ii) to 18 months is deemed a reference to 29 months with respect to all qualified beneficiaries.
- Section 1162(3) provides that the plan may require payment of a premium for any period of continuation coverage, provided that the premium shall not exceed 102 percent of the applicable premium for that period, and may at the election of the payor be made in monthly installments.
- Section 1162(3) provides that in no event may the plan require the payment of any premium before the day which is 45 days after the day on which the qualified beneficiary made the initial election.
The two figures people remember are 18 months and 102 percent, and the two they do not are the ones that decide whether continuation is usable in practice. The 45 day floor in subsection (3) means a person who has just lost coverage is not required to fund it on the day they elect, and the 29 month disability extension in (2)(A)(viii) reaches all qualified beneficiaries rather than only the disabled one. Read alongside sections 1163, 1165 and 1166, which supply the events, the election window and the notice chain that make this section operative.
Active - [2]29 U.S.C. 1163 (what counts as a qualifying event for COBRA continuation)(opens the original record on Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov))Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov)Primary lawPrimaryJurisdiction USLast checked September 6, 2026Updates: Amended only by legislation.ID
usc-29-1163-qualifying-eventsWhat this source supports (7)
- Section 1163(1) lists the death of the covered employee as a qualifying event.
- Section 1163(2) lists the termination, other than by reason of the employee's gross misconduct, or reduction of hours, of the covered employee's employment.
- Section 1163(3) lists the divorce or legal separation of the covered employee from the employee's spouse.
- Section 1163(4) lists the covered employee becoming entitled to benefits under title XVIII of the Social Security Act.
- Section 1163(5) lists a dependent child ceasing to be a dependent child under the generally applicable requirements of the plan.
- Section 1163(6) lists a proceeding in a case under title 11, commencing on or after July 1, 1986, with respect to the employer from whose employment the covered employee retired at any time.
- Section 1163 provides that in the case of an event described in paragraph (6), a loss of coverage includes a substantial elimination of coverage with respect to a qualified beneficiary described in section 1167(3)(C) within one year before or after the date of commencement of the proceeding.
The gross misconduct carve-out in paragraph (2) is the only conduct-based exclusion in the list, and it is the provision most often asserted and least often defined. Note also that paragraphs (3) and (5), divorce or legal separation and a child ceasing to be a dependent, are the two events the statute makes the individual rather than the employer responsible for reporting, which is why they are the ones most often missed.
Active - [3]29 U.S.C. 1165 (the election period for COBRA continuation coverage)(opens the original record on Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov))Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov)Primary lawPrimaryJurisdiction USLast checked September 6, 2026Updates: Amended only by legislation.ID
usc-29-1165-election-periodWhat this source supports (3)
- Section 1165(a)(1)(A) provides that the election period begins not later than the date on which coverage terminates under the plan by reason of a qualifying event.
- Section 1165(a)(1)(B) provides that the election period is of at least 60 days' duration.
- Section 1165(a)(1)(C) provides that the election period ends not earlier than 60 days after the later of the date on which coverage terminates by reason of the qualifying event, or, in the case of any qualified beneficiary who receives notice under section 1166(4), the date of that notice.
The election period is measured from the later of coverage ending and the notice arriving, so a late notice moves the deadline rather than shortening the window. That is the practical protection in this section and it is why the notice dates in section 1166 are worth recording at the time.
Active - [4]29 U.S.C. 1166 (who must give notice of a qualifying event, and by when)(opens the original record on Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov))Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov)Primary lawPrimaryJurisdiction USLast checked September 6, 2026Updates: Amended only by legislation.ID
usc-29-1166-notice-requirementsWhat this source supports (3)
- Section 1166 requires the employer of an employee under a plan to notify the administrator of a qualifying event described in paragraph (1), (2), (4) or (6) of section 1163 within 30 days of the date of the qualifying event, or in the case of a group health plan which is a multiemployer plan such longer period as may be provided in the terms of the plan.
- Section 1166 requires the administrator to notify any qualified beneficiary with respect to the event of that beneficiary's rights under the subsection, within 14 days of the date on which the administrator is notified, or in the case of a multiemployer plan such longer period as may be provided in the terms of the plan.
- Section 1166 provides that each covered employee or qualified beneficiary is responsible for notifying the administrator of the occurrence of any qualifying event described in paragraph (3) or (5) of section 1163 within 60 days after the date of the qualifying event.
The chain has three links and they run on different clocks: the employer has 30 days to tell the administrator, the administrator has 14 days to tell the beneficiary, and for divorce, legal separation or a child ceasing to be a dependent the duty to report sits on the individual with 60 days. Those two events are the ones an employer has no way of knowing about, which is the reason the statute allocates them differently.
Active - [5]26 U.S.C. 4980H(c) (who is an applicable large employer, and who is a full-time employee)(opens the original record on Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov))Office of the Law Revision Counsel, U.S. House of Representatives (uscode.house.gov)Primary lawPrimaryJurisdiction USLast checked September 6, 2026Updates: Amended only by legislation.ID
usc-26-4980h-applicable-large-employerWhat this source supports (3)
- Section 4980H(c)(2) defines applicable large employer as, with respect to a calendar year, an employer who employed an average of at least 50 full-time employees on business days during the preceding calendar year.
- Section 4980H(c)(2) provides that in counting, an employer shall, in addition to the number of full-time employees for any month otherwise determined, include for that month a number of full-time employees determined by dividing the aggregate number of hours of service of employees who are not full-time employees for the month by 120.
- Section 4980H(c)(4) defines full-time employee as, with respect to any month, an employee who is employed on average at least 30 hours of service per week.
Two thresholds are commonly conflated. Full-time means 30 hours of service per week on average, which is lower than most employers assume, and the 50 employee test is an average over the preceding calendar year that counts part-time hours through the divide-by-120 rule. An employer can therefore become an applicable large employer without ever having 50 people on the payroll at once.
Active - [6]29 CFR 2590.606-2 - Notice requirement for employers (COBRA continuation coverage)(opens the original record on Cornell Legal Information Institute, reproducing the Code of Federal Regulations)Cornell Legal Information Institute, reproducing the Code of Federal RegulationsSecondarySecondaryJurisdiction USThird-party reproductionLast checked September 1, 2026Updates: on-amendmentID
cfr-29-2590-606-2-liiWhat this source supports (4)
- The section is titled Notice requirement for employers.
- For most plans the employer must furnish the notice to the plan administrator not later than 30 days after the date on which the qualifying event occurred.
- For plans under which continuation coverage commences on the date of loss of coverage, the notice must be provided not later than 30 days after the date on which a qualified beneficiary loses coverage under the plan due to the qualifying event.
- Multiemployer plans may provide for a longer notice period than the periods otherwise required, as specified in the plan documents.
ActiveReproduction - [7]29 CFR 2590.606-4 - Notice requirements for plan administrators (COBRA continuation coverage)(opens the original record on Cornell Legal Information Institute, reproducing the Code of Federal Regulations)Cornell Legal Information Institute, reproducing the Code of Federal RegulationsSecondarySecondaryJurisdiction USThird-party reproductionLast checked September 1, 2026Updates: on-amendmentID
cfr-29-2590-606-4-liiWhat this source supports (3)
- The section is titled Notice requirements for plan administrators.
- The section provides that upon receipt of a notice of qualifying event the administrator shall furnish to each qualified beneficiary a notice not later than 14 days after receipt of the notice of qualifying event.
- Where the employer is also the plan administrator, the section provides that the administrator shall furnish to each qualified beneficiary a notice not later than 44 days after either the date coverage is lost or the date the qualifying event occurred, depending on the plan provisions.
ActiveReproduction - [8]26 CFR 54.4980H-1 - Definitions (employer shared responsibility)(opens the original record on Cornell Legal Information Institute, reproducing the Code of Federal Regulations)Cornell Legal Information Institute, reproducing the Code of Federal RegulationsSecondarySecondaryJurisdiction USThird-party reproductionLast checked September 2, 2026Updates: on-amendmentID
cfr-26-54-4980h-1-liiWhat this source supports (4)
- The section is headed Definitions.
- Paragraph (a)(21)(i) defines a full-time employee as an employee who is employed an average of at least 30 hours of service per week with an employer.
- Paragraph (a)(21)(ii) provides that 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours of service per week.
- Paragraph (a)(4) defines an applicable large employer as an employer that employed an average of at least 50 full-time employees, including full-time equivalent employees, on business days during the preceding calendar year.
ActiveReproduction - [9]26 CFR 54.4980H-5 - Assessable payments under section 4980H(b) (affordability safe harbors)(opens the original record on Cornell Legal Information Institute, reproducing the Code of Federal Regulations)Cornell Legal Information Institute, reproducing the Code of Federal RegulationsSecondarySecondaryJurisdiction USThird-party reproductionLast checked September 2, 2026Updates: on-amendmentID
cfr-26-54-4980h-5-liiWhat this source supports (6)
- The section is headed Assessable payments under section 4980H(b).
- Paragraph (e)(2) provides three affordability safe harbors: the Form W-2 safe harbor, the rate of pay safe harbor, and the federal poverty line safe harbor.
- The Form W-2 safe harbor measures the employee contribution against 9.5 percent of that employee's Form W-2 wages from the employer for the calendar year.
- The rate of pay safe harbor, for an hourly employee, measures the contribution against 9.5 percent of an amount equal to 130 hours multiplied by the employee's hourly rate of pay.
- The federal poverty line safe harbor measures the contribution against 9.5 percent of a monthly amount determined as the federal poverty line for a single individual for the applicable calendar year, divided by 12.
- All three safe harbors in this section are expressed against the same 9.5 percent threshold.
ActiveReproduction