Texas adds a second layer on top of federal COBRA: state continuation reaches fully insured groups of any size, for up to nine months.
Federal COBRA covers employers with 20 or more employees. Texas state continuation fills the gap for smaller fully insured groups and adds time after COBRA ends. Which layer applies depends on headcount and on how the plan is funded.
How federal COBRA and Texas continuation fit together.
Federal COBRA Still Comes First
If the employer had 20 or more employees on a typical business day last year, federal COBRA applies. Former employees can generally continue for up to 18 months after a job loss or reduction in hours, and up to 36 months after events such as divorce or loss of dependent status.
Texas Continuation Covers Smaller Groups
The Texas Department of Insurance says state continuation is for former employees and families who are not eligible for COBRA or who have used up their COBRA coverage. For someone who is not COBRA-eligible, it can last up to nine months.
It Adds Time After COBRA Ends
For someone who was COBRA-eligible, Texas continuation can follow federal COBRA for up to six more months. It is a bridge, and it is easy to miss because the carrier, not the employer, usually administers it.
Fully Insured Plans Only
Texas continuation applies to health plans issued by licensed insurers and HMOs under the Texas Insurance Code. The Department of Insurance says it does not apply to self-funded ERISA plans, which is why funding type decides the answer.
Qualifying Rules Differ
Texas continuation has its own prior-coverage and eligibility rules, including a requirement of continuous coverage before the plan ended. Termination for cause is treated differently than a layoff, so the reason for the separation matters.
Longer Periods Exist in Some Dependent Cases
Texas law gives surviving or divorced dependents longer continuation in certain situations. Ask the carrier to confirm the period for a specific case before telling a family how long coverage will last.
What continuation costs in Texas, and why it feels high.
Federal COBRA: Up to 102 Percent
COBRA premium can be up to 102 percent of the total plan cost, which is the employer share, the employee share and a 2 percent administrative fee. On a $700 monthly premium, that is $714 a month for one person.
Disability Extension: Up to 150 Percent
If the Social Security Administration finds the person disabled, months 19 through 29 can be billed at up to 150 percent of the plan cost. Employers should have a process for catching disability notices before the 18-month mark.
Texas Continuation: Full Premium
The Texas Department of Insurance describes state continuation as paid by the former employee at the full premium. Ask the carrier for the exact monthly figure in writing so the employee sees the price before electing.
Why It Feels Expensive
While employed, the person paid only a share. On continuation they pay the whole bill, so a plan that cost $150 a paycheck can show up as $700 or more a month. Explaining that early prevents most complaints.
What to settle before the first separation happens.
Is the plan fully insured or self-funded?
The answer decides whether Texas continuation exists at all. Confirm the funding type with the carrier and put it in the benefits file so HR is not guessing on a termination day.
Who sends the notices and who bills?
Federal COBRA notices have deadlines, and the carrier or a vendor may handle state continuation separately. Ask who sends the election notice, who collects premium and who tracks the end date.
What does the employee see on day one?
Ask for a one-page cost illustration that shows the full monthly price and the Marketplace alternative. A former employee comparing the two on the same sheet is less likely to miss the 60-day election window.
Do we have employees in more than one state?
A Texas resident on a plan issued in another state can raise a question about which state law applies. Ask the carrier where the policy was issued and have it confirm in writing.
The questions Texas employers ask about COBRA.
How much is COBRA in Texas?
Federal COBRA premium can be up to 102 percent of the full plan cost. For a plan that costs $700 a month in total, that is $714 for one person. Texas state continuation is described by the Texas Department of Insurance as paid at the full premium by the former employee.
How long does COBRA last in Texas?
Federal COBRA lasts up to 18 months after a termination or reduction in hours and up to 36 months after other qualifying events. Texas state continuation can last up to nine months for someone who is not COBRA-eligible, or up to six months after COBRA for someone who is.
Does Texas have its own mini-COBRA?
Yes. Texas has a state continuation law that applies to fully insured group health plans. It reaches former employees whose employer is too small for federal COBRA, and it extends coverage for some people whose COBRA has ended.
Does Texas continuation apply to self-funded plans?
No. The Texas Department of Insurance says it does not apply to employer self-funded ERISA plans. Those plans follow federal COBRA only, so confirm how your plan is funded.
Our company has fewer than 20 employees. Is there any COBRA obligation?
Federal COBRA does not apply, but Texas continuation can if the plan is fully insured. The carrier usually handles it, so ask for its continuation procedure.
Who has to send the COBRA notice?
The employer notifies the plan administrator within 30 days of a qualifying event, and the administrator sends the election notice within 14 days after that. Many employers hand this to a COBRA administrator to avoid missed deadlines.
How long does the employee have to elect COBRA?
At least 60 days from the date of the election notice or the date coverage would end, whichever is later. After electing, the first premium is generally due within 45 days.
Can an employee leave COBRA early and get a Marketplace plan?
Losing job-based coverage opens a 60-day special enrollment period on the Marketplace. Many people compare Marketplace price against COBRA before electing, which is why we recommend giving them both numbers.
General information about continuation coverage, not legal advice. Plan-specific questions belong with ERISA counsel and your carrier, and we will bring them in.
Where these details come from.
This page summarizes public guidance reviewed in October 2026. State rules change, so confirm current requirements with the Texas Department of Insurance and your carrier.
Texas Department of Insurance: Employer Responsibilities for Health Coverage →
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