COBRA billing looks like an accounts-receivable task and is really a compliance task. The amount you may charge, when payment is due, what counts as timely, and how you handle a shortfall are all governed by rules — and getting any of them wrong turns a routine termination of coverage into a claim.
What You May Charge
Plans may generally charge qualified beneficiaries up to 102 percent of the applicable premium — the full cost of coverage plus a 2 percent
...An employer or plan can end COBRA coverage early, before the 18-, 29- or 36-month maximum, only for a reason the law allows. The reasons are: a premium is not paid in full within the grace period, the employer stops maintaining any group health plan, the qualified beneficiary becomes covered under another group health plan or entitled to Medicare after electing COBRA, a disability extension ends because Social Security finds the person is no longer disabled, or the beneficiary is terminated ...
COBRA obliges covered employers to offer continuation of group health coverage after certain events. The statute is not conceptually difficult; the risk lies almost entirely in notice obligations and deadlines, which are precise and strictly enforced.
Which Employers Are Covered
COBRA generally applies to group health plans maintained by employers with 20 or more employees on more than 50 percent of typical business days in the preceding calendar year. Both full and
...COBRA coverage lasts up to 18 months after a termination of employment or reduction in hours, up to 29 months when a qualified beneficiary is disabled and the disability extension applies, and up to 36 months after other qualifying events such as the employee's death, divorce or legal separation, or a child losing dependent status. These are maximums. Coverage can end sooner for nonpayment or another permitted reason, and a plan may choose to offer longer continuation than the law ...
COBRA's election and payment timelines are strict, specific, and among the most litigated parts of benefits administration. Most disputes turn on dates — when a notice was sent, when an election was made, when a payment was postmarked — which makes this an area where documentation matters more than judgment.
The Election Period
A qualified beneficiary must be given an election period of at least 60 days to decide whether to continue coverage. That period
...A COBRA qualifying event is an event that would cause a covered employee, spouse or dependent child to lose group health plan coverage. There are seven: the employee's termination (other than for gross misconduct), a reduction in the employee's hours, the employee's death, divorce or legal separation, the employee becoming entitled to Medicare, a child ceasing to be a dependent, and, for retirees, an employer's bankruptcy. The event only counts if it actually causes a loss of coverage, and ...
COBRA notice deadlines run in a fixed sequence: a general notice within 90 days after plan coverage begins, an employer notice to the plan administrator within 30 days of a qualifying event, and an election notice from the administrator within 14 days after that (44 days in total when the employer administers the plan itself). Qualified beneficiaries have their own 60-day deadline to report divorce, legal separation or a child losing dependent status. Each clock starts from a different ...
A COBRA compliance checklist has to cover six things: confirming the plan is subject to COBRA, issuing the general notice, catching every qualifying event, meeting each notice deadline, administering elections and premiums correctly, and ending coverage only on a permitted ground with the right notice. Most COBRA failures are not misunderstandings of the law; they are steps that nobody owned. The checklist below is organized by stage so each item can be assigned to a specific person or ...
The COBRA premium is one of the few numbers in benefits administration where being wrong in either direction creates a problem. Charge too much and you have a compliance violation and a refund obligation. Charge too little and the plan absorbs the difference — and if you self-insure, that difference is real money against a population that is, by definition, adversely selected.
This guide covers how the applicable premium is determined, when the 102 percent and 150 percent ...
COBRA administration fails in predictable places. An employee's hours drop below the benefits threshold and nobody treats it as a qualifying event. A divorce is never reported. A termination notice goes out on day 31 instead of day 30. Each of these is a small clerical miss that can carry statutory penalties and — far more expensively — leave the employer holding the bag for claims that should have been the individual's responsibility.
This guide lays out every qualifying ...
If your organization has employees in California, you already know that federal COBRA is only part of the story. CalCOBRA — California's state continuation coverage law — applies to employers with 2 to 19 employees and adds a layer of complexity that many benefits administrators find challenging. From eligibility requirements and notice obligations to coordination with federal COBRA for larger employers, the rules demand precision. Getting it wrong can expose your organization to ...
Few compliance challenges trip up HR professionals more than the intersection of FMLA, ADA, COBRA, and workers' compensation. Each of these laws has its own eligibility criteria, notice requirements, documentation rules, and timelines — and they frequently apply to the same employee situation simultaneously. An ...
COBRA administration is one of the most detail-intensive responsibilities in HR and benefits management. Missed deadlines, incorrect election notices, or improperly calculated premiums can expose your organization to excise taxes of $100 per day per affected individual, DOL enforcement actions, and costly litigation. Despite these high stakes, many benefits administrators learn COBRA through trial and error rather than structured training. A quality
Administering the Consolidated Omnibus Budget Reconciliation Act (COBRA) is one of the most high-stakes responsibilities a human resources department can undertake. Designed to provide a temporary safety net for employees and their dependents who lose group health coverage, COBRA is governed by an intricate web of federal regulations. When executed correctly, it offers vital continuity of care during vulnerable life transitions. When mismanaged, it exposes employers to severe financial ...
Managing employee benefits is a complex undertaking, but the stakes rise significantly when an employee takes a leave of absence. During periods of extended leave, HR professionals and benefits administrators must navigate a web of federal regulations, including the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), and the Consolidated Omnibus Budget Reconciliation Act (COBRA).
A misunderstanding of when exactly a leave of absence triggers COBRA ...
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