COBRA administration looks straightforward on paper: an employee has a qualifying event, you send a notice, they elect coverage or they don't. In practice, it's one of the more unforgiving corners of benefits compliance. The timelines are strict, the notice requirements are specific, and the penalties for getting it wrong can add up fast, even when the mistake was completely unintentional.

The good news is that most COBRA missteps fall into a handful of predictable categories. Once you know where employers typically go wrong, it's much easier to build a process that avoids those pitfalls altogether.

Here are five of the most common COBRA mistakes, and what to do instead.

1. Missing Notification Deadlines

COBRA law sets firm timelines for sending election notices to qualified beneficiaries, and there's not much flexibility built in. Miss the window, and you could be looking at penalties or even liability for claims that would have been covered under COBRA.

The Fix: Don't rely on memory or informal handoffs. Put a written procedure in place for tracking qualifying events the moment they happen, and make sure the notice clock starts immediately. If more than one person touches benefits administration, HR, payroll, a manager who processes terminations, everyone should know exactly who owns the notice-sending responsibility. Ambiguity is where deadlines slip through the cracks.

2. Sending Incomplete or Incorrect Notices

It's not enough to send a notice on time, it also has to say the right things. COBRA notices are required to include specific details about coverage, cost, deadlines, and rights. A notice that's missing a piece of that information, or based on outdated language, can create compliance exposure even if it went out on schedule.

The Fix: Work from a standardized, legally compliant template rather than recreating notices from scratch each time. Regulations shift, so build in a regular review to catch outdated language or missing elements before they turn into a problem. A good baseline is to implement an annual audit process.

3. Losing Track of Premium Payments

COBRA comes with defined grace periods for premium payments, and getting the timing wrong in either direction is a compliance risk. Cut off coverage too early and you may face a claims dispute; let unpaid coverage run too long and you're extending benefits you're not obligated to provide.

The fix: Keep clear, consistent records of when payments are due, received, and posted. This doesn't have to be sophisticated, even a well-maintained spreadsheet can dramatically cut down on errors, but it does have to be consistent. The goal is to always know exactly where each participant stands.

4. Mishandling Coverage Terminations

COBRA coverage can only be ended early under specific circumstances: nonpayment, gaining other group coverage, and a handful of other defined events. Terminating coverage outside those parameters, or without clear justification, is a common source of claims disputes.

The Fix: Before ending anyone's coverage, document the reason and confirm it actually meets one of COBRA's allowed criteria. A quick verification step here can save a lot of back-and-forth later.

5. Not Keeping Proper Documentation

If a dispute ever arises, your ability to demonstrate compliance often comes down entirely to your records. No paper trail, no proof.

The fix: Retain copies of every notice sent, proof of mailing, payment records, and related correspondence for at least the full COBRA coverage period, ideally longer. When in doubt, keep it.

The Bottom Line

COBRA doesn't leave much margin for error, and the mistakes above are some of the easiest ways employers unintentionally end up out of compliance. Solid processes with clear ownership, standardized notices, consistent tracking, and thorough documentation go a long way toward closing those gaps.

That said, even with good processes in place, COBRA administration is time-consuming, and the stakes of getting it wrong are high. That's why many employers choose to work with an experienced third-party administrator rather than manage it entirely in-house. A partner who handles COBRA day in and day out can help make sure every notice, deadline, and detail is accounted for which reduces risk and frees up internal resources for everything else on your plate.