Federal COBRA applies to employers with twenty or more employees on more than half the typical business days in the preceding calendar year. Part-time employees count fractionally. Below the threshold, most states run their own continuation statute — frequently called mini-COBRA — with shorter periods and different notice rules, so being under twenty rarely means having no obligation at all.
| Deadline | Whose | Length |
|---|---|---|
| Notify the plan administrator of a qualifying event | Employer | 30 days from the event |
| Send the election notice | Plan administrator | 14 days from being notified — 44 days where the employer administers its own plan |
| Elect coverage | Qualified beneficiary | 60 days from the notice or loss of coverage, whichever is later |
| Pay the first premium | Qualified beneficiary | 45 days from electing |
| Pay each subsequent premium | Qualified beneficiary | 30-day grace period each month |
Read the third and fourth rows together. Someone can elect on day sixty and pay on day forty-five after that, which means coverage may be reinstated retroactively more than three months after termination — and every claim incurred in the meantime becomes payable. On a self-funded plan that is your money. It is the single most expensive feature of COBRA and the one employers most often fail to plan for.
Termination of employment for any reason other than gross misconduct, or a reduction in hours below the eligibility threshold. The ordinary case.
Where the Social Security Administration determines the qualified beneficiary was disabled within the first sixty days. The premium may rise to 150 percent of the plan cost for the extension period.
Divorce or legal separation, death of the employee, a child ageing off the plan, or the employee becoming entitled to Medicare. Applies to the spouse and children.
There are two notices, not one. The election notice goes out after a qualifying event. The general notice goes to every employee and spouse within ninety days of coverage first beginning, explaining that COBRA rights exist. It is easy to overlook because nothing has happened to prompt it, and it is a standard finding in a Department of Labor audit.
Mail it to the home address, to the employee and spouse jointly, and keep proof. In litigation the question is almost never whether the notice was adequate — it is whether it was sent, and whether you can show it.
We set up the notice process, coordinate with a third-party administrator where you want the premium collection handled externally, and make sure the termination entered in Employee Navigator triggers the COBRA event rather than sitting in a separate system nobody reconciles. Entering terminations promptly is most of what keeps this clean.
No fee, and no obligation to move the business. Most employers who contact us are simply trying to work out whether the number in front of them is a fair one.
Waugh Agency has advised employers on health and welfare benefits since 1985. Our full site — including Medicare, individual and travel coverage — is at waughagency.com.
