COBRA election period and premium payment deadlines

Federal COBRA applies to group health plans maintained by private-sector employers that had 20 or more employees on more than 50 percent of typical business days in the prior calendar year; part-time employees count as fractions of a full-time employee. State and local government plans follow parallel rules under the Public Health Service Act, church plans are exempt, and federal employees use FEHB continuation instead.

Employers under 20 are not off the hook. Most states run “mini-COBRA” continuation for insured plans — California (Cal-COBRA, for employers with 2 to 19 employees), New York, Texas and others, with durations and notice rules set by each state; confirm the current terms with the state insurance department. Each comes with its own notice rules. These attach to the insurance policy, so a self-funded small plan generally sits outside them. Check the state where the policy is issued, not where the employee lives.

• General (initial) notice: within 90 days after group health coverage begins, to the employee and spouse (29 CFR 2590.606-1).
• Employer to plan administrator: within 30 days after a qualifying event the employer controls or knows about — termination, reduction in hours, the employee's death or Medicare entitlement, employer bankruptcy (2590.606-2).
• Employee or beneficiary to administrator: within 60 days for divorce, legal separation, or a child losing dependent status (2590.606-3). The SPD must describe this procedure or the plan loses the benefit of the deadline.
• Administrator election notice: within 14 days after receiving notice of the qualifying event (2590.606-4). When the employer is its own administrator the two periods combine into 44 days from the qualifying event (or from the loss of coverage, if the plan measures from that date).
• Notice of unavailability: within 14 days of a request the plan denies. Notice of early termination: as soon as practicable after the decision.

These windows run from the event or the receipt of notice, not from the date HR gets to the file. A termination sent to the TPA in a month-end batch has already used part of its 44 days.

Election: at least 60 days from the later of the date the election notice is provided or the date coverage would otherwise be lost (26 CFR 54.4980B-6). Each qualified beneficiary has an independent right to elect, so a spouse may elect even when the employee waives. A waiver can be revoked inside the 60 days, and coverage is retroactive to the loss date either way.

Initial premium: at least 45 days after the date of election (26 CFR 54.4980B-8). That single payment covers every month from the loss of coverage through the payment date. The plan may hold claims until the payment lands but may not cancel before the 45 days run.

Subsequent premiums: due on the plan's regular date with a grace period of at least 30 days. Payment is timely if made within the grace period. A short payment counts as full if the shortfall is the lesser of $50 or 10 percent of the amount due, unless the plan notifies the beneficiary and allows a reasonable period (30 days is the regulatory safe harbor) to cure. Coverage may be terminated for nonpayment only after the grace period ends.

Up to 102 percent of the applicable premium — the full cost of coverage for a similarly situated active employee, employer and employee shares combined, plus a 2 percent administrative load. During a disability extension the plan may charge up to 150 percent for months 19 through 29. A self-funded plan sets the applicable premium by a reasonable actuarial estimate or by the prior period's cost adjusted for inflation, fixed for a 12-month determination period.

Maximum periods: 18 months for termination of employment or reduction in hours; 29 months when a qualified beneficiary is determined disabled by Social Security within the first 60 days of COBRA and notifies the plan within 60 days of the determination and before the 18 months end; 36 months for the employee's death, divorce or legal separation, the employee's Medicare entitlement, or a child losing dependent status. A second qualifying event during the initial 18 months extends the spouse and dependents to 36 months total. Where the employee became entitled to Medicare before terminating, the spouse and dependents get the longer of 18 months from termination or 36 months from the Medicare date.

Coverage can end early for nonpayment, if the employer drops all group health coverage, or if the beneficiary gains other group coverage or Medicare after electing.

Worked example: an employee is terminated on June 30, 2026, coverage ends the same day, and the employer uses a TPA as COBRA administrator.

Speed favors the employer. An election notice mailed July 10 instead of August 13 moves the election deadline up to September 8 and shortens the window of retroactive liability.

ERISA §502(c)(1): a court may award up to $110 per day, payable to the beneficiary, for failing to provide a required COBRA notice, running from the date of the failure. The $110 is fixed at 29 CFR 2575.502c-1 and is not inflation-adjusted, so DOL's decision to skip the 2026 adjustment does not touch it. Courts also award attorney's fees and, often, the medical claims the beneficiary incurred while uncovered.

IRC §4980B excise tax: $100 per day per qualified beneficiary during the noncompliance period, capped at $200 per day per family for one qualifying event. For failures that are uncorrected when the IRS sends an examination notice, the minimum tax is $2,500, rising to $15,000 if the year's failures were more than de minimis. For unintentional failures the annual tax is capped at the lesser of 10 percent of the employer's prior-year group health plan costs or $500,000. The employer self-reports on Form 8928.

• Compare your general and election notices against the DOL model notices; using the model content is a safe harbor for what the notice must say.
• Write the employer-to-administrator handoff into the offboarding checklist with a 30-day deadline, and ask the TPA for a monthly report of notice dates against qualifying-event dates.
• Confirm the 45-day and 30-day periods in the TPA's cancellation logic. Automatic termination on day 31 after a missed payment, before the grace period math is checked, is a frequent error.
• Check the participant count on your BenefitsLedger employer record. A sharp drop between filings usually means a workforce event — and a batch of qualifying events that needed notices.
• If you have an insured plan and employees in mini-COBRA states, confirm in writing whether the carrier or the TPA sends those notices.