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State Continuation vs. Federal COBRA

Generally, the number of full-time employees and FTEs in the employees' company determines whether a group is subject to federal COBRA laws or state continuation laws (sometimes called “mini-COBRA”).

  • Federal COBRA generally applies to companies with at least 20 full-time employees or full-time equivalents (FTEs) for 50% of their working days in the previous calendar year.

  • State continuation generally applies to companies with less than 20 full-time employees and FTEs for 50% of their working days in the previous calendar year. Companies not subject to federal COBRA are usually subject to the state continuation regulations of the state where the company's plans are based. (This is called Cal-COBRA in California.)

Companies with fewer than 20 full-time employees may be eligible for federal COBRA based on the hours worked by part-time employees. Part-time employees are counted as a fraction of a full-time employee, and these fractions are added to the total FTE count. Calculate your FTE count here.

Gusto will determine whether your company should be classified as subject to federal COBRA or state continuation based on your company’s payroll history. For more information about continuation coverage with Gusto, click here.

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