When an employee's termination takes effect and the COBRA clock starts that same day, a missed handoff can quickly become a compliance problem. The basic sequence is clear: a qualifying event creates a notice obligation, covered individuals get 60 days to elect continuation coverage, and the employer has a defined period for each action. In practice, rigid deadlines, detailed notice requirements, and the legal consequences of mistakes make administration difficult.
For HR generalists at mid-size companies who handle COBRA alongside many other responsibilities, this checklist puts the required actions in order and highlights the areas where errors happen most often.
Step 1: Identify events that create COBRA rights
COBRA covers qualifying events that result in a covered individual losing group health plan coverage. These events include termination of employment, whether voluntary or involuntary but not for gross misconduct, a reduction in hours below the plan's eligibility threshold, divorce or legal separation from the covered employee, a dependent child reaching age 26 and aging out of coverage, the death of the covered employee, and the covered employee becoming entitled to Medicare.
Federal COBRA generally covers employers with 20 or more employees on more than 50 percent of typical business days during the prior calendar year. Certain states have mini-COBRA rules that give employees of smaller employers continuation rights, sometimes with different coverage periods and premium limits. If your company is close to the 20-employee threshold, verify the applicable obligations with employment counsel.
The departing employee is not the only person who may elect COBRA. Every qualified beneficiary covered by the plan immediately before the qualifying event has an independent election right. Qualified beneficiaries include the employee's spouse and dependent children. When they use different addresses, each must receive a separate election notice.
Step 2: Give new enrollees the General Notice
COBRA administration begins before anyone departs. After a new employee enrolls in the group health plan, ERISA requires the plan to provide a General Notice explaining COBRA rights within 90 days after coverage starts. If a carrier or TPA performs this task, verify that the General Notice is part of the new hire enrollment materials. For in-house administration, the Department of Labor offers a model General Notice containing the required content fields.
Omitting this step does not stop COBRA from applying after a qualifying event. It can, however, affect whether the election period begins on the qualifying event date or on a later date, which may unexpectedly lengthen the time your team must administer the process.
Step 3: Tell the plan administrator about the event within 30 days
Following a qualifying event, the employer has 30 calendar days to notify the plan administrator. At many mid-size companies, the employer and plan administrator are the same, making this an internal task for HR to record the event and its date. When a TPA manages COBRA, the employer must notify the TPA within 30 days so the election notice can be issued on schedule.
The 30-day period begins on the qualifying event date, rather than when HR receives notice of it. If a termination is effective on the 12th of the month, the clock starts on the 12th even when HR does not receive formal notification until the 16th. Your process should capture the event date when the event happens, not when the related paperwork arrives.
For events that an employee or beneficiary must report to the plan, such as divorce, legal separation, disability, or a child losing dependent status, the plan must allow at least 60 days for that report. Once the plan receives the notice, the 14-day period for sending the election notice starts.
Step 4: Deliver the COBRA Election Notice within 14 days
After the plan administrator receives notice of the qualifying event, the plan has 14 days to send a COBRA Election Notice to every qualified beneficiary. When the employer also serves as plan administrator, the outside limit from the event to notice delivery is 44 days, calculated as 30 plus 14.
The election notice must state required information, including the plan name and contact details, the continuation coverage available, the premium amount and payment due date, the beginning and ending dates of the 60-day election period, the deadline for the initial premium if coverage is elected, and what happens if the beneficiary does not elect or pay on time. For in-house administrators, the safest method is to use the DOL model notice and complete every plan-specific field correctly.
A qualified beneficiary who lives at a different address must receive a separate notice at that address. Thus, when a departing employee and a covered spouse reside at different mailing addresses, the spouse needs a separate notice sent to the spouse's address. HR teams miss this requirement more often than they may expect.
Step 5: Administer the 60-day election period
Qualified beneficiaries receive 60 days to elect continuation coverage. That period begins on the later of two dates: the qualifying event date, or the date coverage would otherwise end, and the date the election notice is provided. A late notice therefore pushes the end of the election period later.
COBRA coverage takes effect retroactively as of the date the prior coverage would have ended. Someone may wait until day 59 to elect coverage and still receive full backdating to the day after the earlier coverage ended. This leaves employers with administrative uncertainty, since COBRA cannot be closed out until the election period ends or the individual clearly declines coverage.
Failure to elect within 60 days permanently ends COBRA rights for that qualifying event. Once the period expires, a missed election deadline generally cannot be corrected, except in exceptional situations such as a notice that was improperly issued.
Step 6: Handle premiums and applicable grace periods
COBRA premiums can equal as much as 102% of the total coverage cost, including both the employee's and employer's former contributions. The initial premium payment is due within 45 days after COBRA is elected. Later monthly premiums are due on the first day of each coverage month and receive a 30-day grace period before non-payment can cause coverage to end.
The plan may not terminate coverage before the grace period has completely run. Claims incurred during that period must be processed when payment is made before the grace period expires. One frequent in-house mistake is ending coverage on the first day payment is missing instead of waiting through the entire 30-day grace period.
When COBRA ends for any reason, the plan must issue an early termination notice stating the reason coverage ended and the termination date. This notice is required even when non-payment causes the termination.
Standard COBRA periods and circumstances that alter them
For termination of employment or a reduction in hours, the standard COBRA period is 18 months. Events such as divorce, the covered employee's death, or a dependent child losing eligibility extend the period to 36 months. A disability extension applies when Social Security determines that a qualified beneficiary is disabled within the first 60 days of COBRA coverage. It adds 11 months to the 18-month period, creating 29 months, when the beneficiary tells the plan about the disability determination within 60 days and before the original 18-month period ends.
Coverage can end before the standard period when the individual gains coverage through another group health plan, becomes entitled to Medicare, does not pay premiums within the applicable grace period, or the employer stops maintaining every group health plan.
Records your team should retain
For every qualifying event, document the event type and date, the names and addresses of each qualified beneficiary who received notice, the date and delivery method for the election notice, whether coverage was elected or declined and the date of that decision, every premium receipt with its related coverage period, and the termination date and reason when coverage ends.
Not every HR team needs a dedicated COBRA specialist. Many mid-size companies administer COBRA internally without one. Problems usually arise when the process belongs to whoever is available instead of following a written workflow with assigned ownership. At companies with regular turnover, documenting each step and naming its owner can separate consistent compliance from recurring exposure.