This page starts with an overview of the compliance requirements for the Consolidated Omnibus Budget Reconciliation Act (COBRA), continues with a list of some common administrative errors, then concludes with a COBRA compliance checklist to help your organization comply with the requirements under COBRA.
What Is COBRA?
Put simply, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) allows certain individuals who are covered under an employer's group health plan to continue that coverage for a specific period of time if those individuals lose said coverage because of a "Qualifying Event".
Overview Of The Compliance Requirements For COBRA
Under COBRA rules, both group health plans and the individuals losing coverage under those plans have specific guidelines and strict timetables to follow in both offering and electing to receive COBRA coverage.
COBRA compliance is deadline-driven and documentation-heavv for both the employer and the individuals losing coverage due to its multiple timelines and high-risk failure points, with most penalties not coming from denying coverage – but from late or missing notices or premium payments!
Key COBRA Administrative Requirements
Key COBRA management rules for employers to follow:
The Notification Process
Eligibility Determination
Qualifying Events Determination
Election Process
Premium Payments
Coverage Administration
How To Determine Timelines
Ho to Calculate, Bill, And Collect Premiums
Termination of Coverage
Recordkeeping
By effectively managing these key components, employers can fulfill their obligations under COBRA and ensure that eligible individuals receive the continuation coverage to which they are entitled.
Common COBRA Administrative Mistakes
The following are common COBRA management errors performed by employers and TPAs:
Late or Incomplete Notices and Notifications
Incorrect Eligibility Determinations
Improper Premium Calculations
Non-Compliance with COBRA Regulations
Inadequate Recordkeeping
Inadequate Training of Personnel
Compliance Oversight
To mitigate these errors, employers and plan administrators should invest in robust COBRA administration training, maintain meticulous records, and regularly audit their COBRA processes to ensure compliance with applicable laws and regulations.
Top Compliance Risks Under COBRA
Missing the 14/44-day election notice deadline
Sending incomplete or outdated notices
Miscalculating premiums
Failing to track qualifying events (especially reductions in hours)
Assuming a TPA – if you have one - handles everything without oversight
The information below is a draft checklist for COBRA compliance. Feel free to add or delete as needed to meet your organization's needs.
Coverage & Applicability Employer has 20+ employees (COBRA applies) Group health plan is subject to COBRA Identify all qualified beneficiaries: employees, spouses, and dependent children)
Qualifying Events Identification Process to identify qualifying events, including:
General (Initial) Notice COBRA General Notice provided to employees/spouses Delivered within 90 days of plan coverage start Notice should include COBRA rights and election procedures Proof of delivery retained
Employer Notice to Plan Administrator (Skip if employer = plan administrator, but still track internally) Employer notifies plan administrator within 30 days of qualifying event Internal workflow ensures no delays
COBRA Election Notice (Critical Deadline) Election notice sent within 14 days of notice to administrator or 44 days total if employer = administrator Notice should include coverage details, premium cost, election deadline, and payment instructions
Election Period Tracking Beneficiaries given 60 days to elect COBRA Election period tracked accurately Coverage reinstated retroactively if elected
Premium Administration Premiums set correctly: Up to 102% of plan cost Initial payment deadline: 45 days after election Ongoing payments (monthly, minimum 30-day grace period) Payment tracking system in place
Coverage Periods Standard coverage tracked Extended coverage tracked End dates calculated and documented
Early Termination Rules Coverage terminated only for valid reasons such as non-payment of premiums, employer stops offering plan, or Beneficiary gains other coverage Termination notice sent when applicable
Notices & Communication All required COBRA notices documented:
General notice
Election notice
Termination notice
Notices are:
Clear and complete
Delivered timely
Proof of mailing or delivery retained
Recordkeeping & Documentation Maintain records of:
Qualifying events
Notices sent
Elections received
Payments made
Retain records for at least 6 years Documentation audit-ready
Vendor / TPA Oversight (If Outsourced) Third-party administrator (TPA) contract reviewed SLAs include notice timing and error handling Employer monitors TPA performance Perform audits of vendor compliance
Integration With Other Laws Coordination with other laws, such as FMLA No improper termination of active coverage before COBRA
Employee Communication & Support HR prepared to explain COBRA costs vs alternatives (e.g., Marketplace) Consistent, non-misleading communication No advice that could create liability
Compliance Oversight & Risk Controls Internal audit process in place Calendar alerts for deadlines Standard operating procedures (SOPs) documented Legal review of notices/templates
770-410-1219
