The COBRA Timeline generally refers to the specific time limits to notify, elect, and pay for COBRA continuation coverage. Below is an outline of the COBRA Timeline:An employee covered under one or more of the employer’s group health plan experiences a COBRA Qualifying Event.
- (30 days) The employer must notify their Third Party Administrator (TPA) within 30 days after the qualifying event or last day of plan coverage, whichever of these events is later.
- (14 days) The TPA then has 14 days to mail the Qualified Beneficiary’s COBRA election form
- (60 days) The Qualified Beneficiary has 60 days in which to elect coverage. The 60 days begins from the date the election form was mailed to the Qualified Beneficiary, not on the date it is received.
- (45 days) Once COBRA has been elected and the proper forms have been sent to the TPA, the Qualified Beneficiary then has 45 days to make their first COBRA premium payment, retroactive to the date coverage was lost. The 45 day grace period begins with the postmark date of their returned COBRA Election Form.
If The Employer Agrees To Pay The COBRA Participant’s COBRA Premiums For A Period Of Time (Such As In A Severance Agreement), What Is The Process?
If an employer has made arrangements with an employee to cover any amount of their premium payments during their COBRA continuation coverage period, the employer should still follow the standard COBRA procedures. COBRA continuation coverage is not automatic. A Qualified Beneficiary must complete their COBRA election form with in the original 60 day election period in order to continue their coverage.
The 18 month COBRA continuation coverage period does not start until the former employer offers COBRA continuation, regardless of who is paying the premiums.
Example: Employee A’s employment terminates on July 1, 2013 and the employer agrees to pay A’s COBRA premiums for the rest of 2013 as part of a severance agreement. If the employer waits until the employer-paid coverage ends and then offers COBRA continuation on January 1, 2014, the employer has just given Employee A access to an additional 6 months of coverage. It also important to note that not all insurance carriers will honor this type of agreement and the employer can end up self-funding the additional 6 months of coverage.
Managed properly, Employee A should have been notified of his COBRA continuation rights within 30 days of his termination and been required to affirmatively elect COBRA continuation coverage within the COBRA election period. Then the 6 months of employer-paid coverage would count toward the total 18 months of COBRA continuation coverage.
Our COBRA system is flexible and NEO can manage premium tracking and collection of full and partial employer COBRA premium subsidies. Each agreement is different so please contact Basic NEO for more information on your specific situation.