COBRA Election and Payment Rules

The following is an overview of COBRA election and payment rules. Election rules:

• Qualified beneficiaries have 60 days to elect COBRA coverage (from the later of the notice date or coverage loss date)
• After electing, they have 45 days to make the first premium payment
• Subsequent premiums are due monthly, with a 30-day grace period

Payment Rules

• Regarding the initial premium payment: The plan must provide at least 45 days from the date of election for the first premium payment, and not require payment at the time of election
• Regarding the subsequent premium payments: After the first payment, premiums may be due periodically (typically monthly)
• Regarding the premiums charged: For most qualified beneficiaries, the premium may be up to 102% of the cost of coverage for similarly-situated active employees (i.e., employee + employer share + up to 2% admin fee); for a disability extension (months 19-29), the premium may be up to 150% of the plan's cost
• Note that the plan must provide a minimum 30-day grace period for each payment period

Note: This is an excerpt from our COBRA Training & Certification Program.