Administering COBRA continuation coverage is a critical responsibility for employers. Understanding how long employees have to enroll and the employer’s role helps ensure compliance with federal regulations. It also protects former employees from lapses in coverage.
Understanding COBRA enrollment timelines
COBRA coverage is available to employees and their dependents when they experience a qualifying event that causes a loss of group health coverage. Common events include termination of employment, reduction in hours, divorce, or a dependent aging out.
Employers must act quickly to notify the plan administrator after a qualifying event. Prompt communication helps prevent coverage gaps. It also reduces the risk of compliance penalties.
The COBRA election notice
After a qualifying event, the plan administrator must send a COBRA election notice to eligible individuals. The timing depends on who handles administration:
- If the employer is not the plan administrator, the administrator must send the notice within 14 days of receiving notification of the qualifying event.
- If the employer is also the plan administrator, the notice must be sent within 44 days of the qualifying event.
The election notice must include information about the individual’s rights, coverage options, premium costs, and instructions for electing COBRA. Sending the notice accurately and on time is essential for compliance.
Employee election period and coverage effective dates
After receiving the election notice, employees have 60 days to elect COBRA coverage. The election window starts on the later of the date the notice is sent or the date coverage under the group health plan ends.
If an employee elects COBRA, coverage is usually retroactive to the date of the qualifying event. This is valid as long as the first premium is paid on time. Employees typically have 45 days after making the election to pay the initial premium.
Employers should coordinate with their COBRA administrator. This ensures coverage starts correctly and premiums are processed without issues.
Steps for employers to manage COBRA enrollment
Employers can manage COBRA more efficiently by following these steps:
- Confirm qualifying events promptly and identify affected employees.
- Notify the COBRA administrator or insurer within the required timeframe.
- Send the COBRA election notice with all required details.
- Track deadlines and keep documentation to show compliance.
- Coordinate with carriers to confirm coverage and premium payments are accurate.
Outsourcing COBRA administration can reduce administrative burden. It also minimizes the risk of missed deadlines or incomplete notices.
If an employee misses the COBRA deadline
If an employee misses the 60-day window, they lose the right to continuation coverage. Employers cannot extend this deadline.
Employers should keep records showing that the notice was provided on time. It is also a good practice to inform employees of alternative coverage options, such as the Health Insurance Marketplace, Medicaid, or private insurance.
Key takeaways
- Employees have 60 days to elect COBRA coverage after receiving the notice.
- Employers must send the COBRA election notice within 14 days if a separate administrator manages COBRA or within 44 days if the employer also serves as the administrator.
- Timely communication and documentation are essential for compliance.
- Partnering with a COBRA administrator can streamline the process and reduce risk.
