What is COBRA?
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, which is a health insurance program that lets an eligible employee and dependents continue their health insurance benefits if the employee loses his or her job or sees a reduction in work hours.
COBRA allows an employee and their dependents to keep the same health insurance coverage if they are willing to pay the premiums on their own.
Among those who qualify are:
- Retirees
- Former employees
- Spouses of former employees
- Dependent children
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COBRA for the State of Texas
Federal COBRA laws require that employers who have 20 or more full-time employees the previous year to offer employees and their families the opportunity to extend their health coverage in certain situations where the insurance coverage might otherwise end. Employers who have group health plans who have fewer than 20 employees are exempt from federal COBRA requirements.
However, Texas State Continuation laws require that these smaller businesses offer employees and their family continuation coverage for small employers. This law is called the Texas Small Employer Health Insurance Availability Act. Because of Texas laws, any employee who worked for an employer with a group health plan will have the right to continue coverage through COBRA health insurance Texas, as long as the employer has two or more employees and the employee is willing to pay for the coverage.
The state continuation law (Texas Small Employer Health Insurance Availability Act) indicates that the employee can have up to nine months of continuation coverage if the federal laws don’t apply (for small employers). The law does not typically provide an additional 6-month extension after Federal COBRA ends, which is a common misconception.
The Guidelines for COBRA Insurance Texas
Many states have local laws that apply to COBRA. COBRA health insurance Texas gives you 60 days after the qualifying event – such as separation from the employer – to decide whether you want to maintain your health insurance through COBRA. Texas continuation law requires your employer to continue your coverage for six months after traditional COBRA coverage ends if your plan is subject to the Texas insurance laws. The state doesn’t regulate self-funded plans (where the employer directly pays claims), so state continuation laws do not apply to them. These plans are governed exclusively by Federal COBRA and the federal ERISA law.
The employee can continue coverage through Federal COBRA for 18 months (if the qualifying event is job loss/reduced hours), while the employee’s current or ex-spouse or dependent child can continue health insurance coverage for up to 36 months based on the qualifying event.
Deciding if COBRA Health Insurance Texas is Right for You
If you or your spouse has lost group health insurance through an employer for one reason or another, opting for COBRA insurance Texas might be a wise decision. You will keep the same insurance coverage that you have had in the past. While you will be paying more than you had for the coverage, it will likely be less expensive than an unsubsidized individual plan, but potentially more expensive than a subsidized ACA plan.
Due to the scheduled expiration of enhanced ACA subsidies in 2026, Texans above the income limit (400% FPL) will face the full, expensive Marketplace premium. In this scenario, COBRA may be the more affordable option, offering predictable costs and continued access to current doctors
Health insurance is a necessity because of the high cost of healthcare. If you have one medical emergency and lack adequate health insurance coverage, it can lead to financial ruin. If you are eligible to maintain your group health insurance coverage through COBRA, you should give the opportunity serious consideration.
COBRA Health Insurance Texas Cost
When you extend your health insurance coverage with your employer after becoming ineligible for coverage, you will pay more than you had in the past. You will pay what you had paid before, plus the cost is the full group premium plus the administrative fee. For 2026, the cost of an individual COBRA plan in Texas often exceeds $850 to over $1,300 per month, depending on the plan type. For a family, the cost can easily exceed $2,500 to $3,500 per month.
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