Federal Compliance Guide
COBRA administration complete guide
Planlined's guide to COBRA compliance: qualifying events, notification requirements, premium calculations, and timeline management for benefits brokers and employers.
What is COBRA?
The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers with 20+ employees to offer temporary continuation of group health coverage when coverage would otherwise end due to qualifying events.
COBRA applies to group health plans maintained by private-sector employers with 20+ employees and state/local government employers. Federal employees are covered under a similar provision.
State Mini-COBRA Laws
Many states have "mini-COBRA" laws for employers with fewer than 20 employees. Check your state requirements—California, New York, and Texas have specific provisions.
COBRA qualifying events
| Qualifying Event | Duration | Eligible Beneficiaries |
|---|---|---|
| Voluntary or involuntary job loss (except gross misconduct) | 18 months | Employee, spouse, dependents |
| Reduction in work hours | 18 months | Employee, spouse, dependents |
| Employee becomes entitled to Medicare | 36 months | Spouse, dependents |
| Divorce or legal separation | 36 months | Spouse, dependents |
| Death of covered employee | 36 months | Spouse, dependents |
| Dependent child loses eligibility | 36 months | Dependent child |
| Disability (SSA determination) | 29 months | All qualified beneficiaries |
COBRA notification timeline
COBRA premium calculation
Standard rate
Disability extension rate
Example Calculation
Non-compliance penalties
Streamline benefits administration
Planlined helps benefits brokers manage the complexity of employee benefits—from enrollment to COBRA to renewals.
Frequently asked questions
How long do employees have COBRA coverage rights?
Standard qualifying events (job loss, reduced hours) provide 18 months of coverage. Disability extensions can add 11 months for 29 total. Death, divorce, or Medicare eligibility of employee allows 36 months for dependents.
How much can employers charge for COBRA premiums?
Employers can charge up to 102% of the full premium cost (employer + employee portions). For disability extensions months 19-29, the charge can be up to 150%.
What is the COBRA election period?
Qualified beneficiaries have 60 days from the later of: coverage loss date or COBRA election notice date to elect coverage. Once elected, they have 45 days to make the initial premium payment.
What are the penalties for COBRA non-compliance?
Penalties can reach $110/day per violation, plus DOL penalties up to $100/day. Affected individuals can sue for coverage reinstatement and attorneys fees. The IRS can also assess excise taxes.