The short answer
Federal COBRA only applies to employers with 20 or more employees, so people who leave a small business often find they have no COBRA rights at all. Many states fill that gap with their own continuation rules, sometimes called mini-COBRA, that let workers at smaller companies keep their group coverage for a limited time. The specifics — who qualifies, how long, and how to elect — vary by state, so it is worth checking the rule that applies to your former plan.
So if a small-employer job ends, do not assume you have no options; state continuation may still let you keep the group plan briefly.
How the rules differ by state
State continuation programs generally mirror COBRA in spirit but differ in the employer-size threshold and the maximum length of coverage. Because the details change and are set by each state's insurance department, confirm the current terms for your specific plan rather than relying on a general figure. Your former employer or the plan insurer can tell you whether state continuation applies and for how long.
The practical point is that small-employer workers are not automatically shut out — a state rule may bridge the gap even when federal COBRA does not apply.
Compare it to a subsidized ACA plan
Like COBRA, state continuation is usually charged at full premium, so it is worth comparing against a subsidized Marketplace plan. Losing job coverage opens an ACA special enrollment period regardless of employer size, and an individual plan with subsidies is often cheaper. Our how much does COBRA cost guide and subsidies overview help you run the numbers.
The takeaway: check your state's continuation rule for small employers, then compare it against a subsidized ACA plan before deciding.
Frequently Asked Questions
What is mini-COBRA or state continuation?
It is a state rule that lets employees of small companies — those too small for federal COBRA — continue their group health coverage for a limited time after leaving.
Does federal COBRA apply to small employers?
No. Federal COBRA applies to employers with 20 or more employees. Smaller companies fall under state continuation rules instead, where they exist.
Is state continuation cheaper than an ACA plan?
Usually not, since it is charged at full premium. Losing coverage opens an ACA special enrollment period, and a subsidized Marketplace plan is often cheaper.
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