Home/ Benefits & ACA/ Guide № 33

COBRA for Employers: The Timeline That Runs Itself

COBRA is a chain of deadlines — 30 days to notify the plan, 14 for the election notice, 60 for the employee to elect, 18 to 36 months of coverage — and each missed link carries statutory penalties per beneficiary per day.

LegalWorkplace.com Staff Reviewed Sep 2026 · 9 min read

COBRA for Employers: The Timeline That Runs Itself

The chain

Employer notifies the plan within 30 days of the event; the administrator sends the election notice within 14 days; the beneficiary has 60 days to elect.

The coverage

18 months for termination or reduced hours; 36 months for divorce, death, Medicare entitlement, or a child aging out.

The price of failure

IRS excise taxes and ERISA penalties of up to $110/day for notice failures — plus liability for the medical claims themselves.

Not legal advice. Educational guide to general U.S. employment law. Rules vary by state — consult an employment attorney for specific cases.

Who and what COBRA covers

COBRA applies to group health plans of employers with 20 or more employees in the prior year, and gives "qualified beneficiaries" — the employee, spouse, and dependent children on the plan — the right to continue identical coverage at their own expense after a qualifying event. The qualifying events: termination or reduction of hours (18 months), and for spouses and dependents, divorce or legal separation, the employee's death, the employee's Medicare entitlement, or a child aging out of dependent status (36 months). The only termination that doesn't trigger COBRA is one for gross misconduct — an exception so narrow and so litigated that denying coverage on it without counsel is a standing invitation to a lawsuit stacked on whatever dispute the termination already created.

The deadline chain

Day 0

Qualifying event — the separation date from the offboarding flow in the benefits-at-exit guide.

+30 days

Employer notifies the plan administrator of the event. (For divorce or a child aging out, the beneficiary has 60 days to notify you.)

+14 days

The administrator sends the election notice — 44 days total when the employer is its own administrator, as most small plans are. Use the DOL's model notice; deviations are where penalties grow.

+60 days

The beneficiary's election window, running from the later of the notice date or coverage loss. Coverage elected is retroactive to the loss date.

+45 days

First premium due after election; 30-day grace periods thereafter. Nonpayment ends coverage — after the grace period, not before.

Coverage periods and premiums

Continuation runs 18 months for employment-based events and 36 months for family-status events, with an 11-month extension (to 29) where a beneficiary is determined disabled by SSA within the first 60 days. Premiums cap at 102% of the full plan cost — 150% during the disability extension. Coverage must be identical to what similarly situated active employees receive, including open-enrollment rights to switch plans. Early cutoffs are limited: premium failure after grace, coverage under another group plan obtained after electing, Medicare entitlement after electing, or the employer terminating all group health plans entirely.

Failure modes and state mini-COBRA

The recurring failures are administrative: the termination processed in payroll but never reported to the plan; the election notice sent to the old address on file (send to the last known address of employee and spouse — separately where they differ); the gross-misconduct denial made by a manager rather than a lawyer. Penalties stack per beneficiary per day — up to $110/day under ERISA plus IRS excise taxes — and courts can add the uninsured medical claims themselves. Below 20 employees, check your state's mini-COBRA law: most states extend continuation rights to small-group plans with their own notice rules and periods. Wire the whole chain into the offboarding checklist so no human has to remember it — that's what the exit-benefits guide builds.

Frequently asked questions

Which employers are subject to COBRA?

Private-sector employers with 20 or more employees on more than 50% of typical business days in the prior year, offering a group health plan. Smaller employers escape federal COBRA — but most states run 'mini-COBRA' laws that pick up where the 20-employee threshold leaves off.

Does a fired employee get COBRA?

Yes — termination (voluntary or involuntary) is a qualifying event for 18 months of continuation, unless the termination was for 'gross misconduct.' That exception is narrow, litigated, and dangerous to rely on: deny COBRA for gross misconduct only with counsel's sign-off.

How much can we charge for COBRA coverage?

Up to 102% of the plan's full cost (employer plus employee share) — 150% during the 11-month disability extension. The beneficiary gets 45 days after electing to make the first payment, with a 30-day grace period on subsequent premiums.

What happens if we never send the election notice?

Statutory penalties up to $110 per day per beneficiary under ERISA, IRS excise taxes, attorney's fees — and courts can hold the employer liable for the medical expenses the person incurred uninsured. The notice failure cases are the expensive ones.