Administering COBRA (Consolidated Omnibus Budget Reconciliation Act) can be both complex and confusing for employers. There are many deadlines and getting COBRA deadlines wrong can have significant legal consequences. COBRA, not unlike many employment laws, provides grace periods that favor the (former) employee. Knowing the COBRA timelines and deadlines are critical to ensuring compliance.
COBRA law provides for up to 149 days before a COBRA participant (qualified beneficiary) is required to pay the initial premium. This generous timeline often results in adverse selection increasing the claims costs for COBRA participants compared to those for active employees.
A typical COBRA election timeline for the loss of group health coverage due to termination of employment is as follows:
- Employment terminates and subsequently group plan coverage ceases.
- Employer has 30 days from the loss of coverage to notify the plan administrator.*
- Plan Administrator has 14 days to provide a COBRA election notice to the former employee/qualified beneficiary.
- Qualified beneficiary has 60 days from the date of the notification to make an election to continue enrollment in the plan(s).
- Qualified beneficiary has 45 days to pay the first premium.
The law further allows for payment during the grace period of up to 30 days from the first of each month when the following months’ premiums are due.
Following and tracking these timelines can be a complex and time-consuming job. That’s where we come in. Keeping you on track with these timelines is one of the many services myCobraPlan offers. Please call us to learn how we can simplify your COBRA processes and help keep you compliant!
*If you are administering COBRA in-house, this step does not apply (consider yourself instantly notified). Your deadline to mail the election notice is 14 days.
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