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 \u2014 even when the mistake was completely unintentional.<\/p>\n
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.<\/p>\n
Here are five of the most common COBRA mistakes \u2014 and what to do instead.<\/p>\n
1. Missing notification deadlines<\/strong><\/p>\n 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.<\/p>\n The fix:<\/strong> 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 \u2014 HR, payroll, a manager who processes terminations \u2014 everyone should know exactly who owns the notice-sending responsibility. Ambiguity is where deadlines slip through the cracks.<\/p>\n 2. Sending incomplete or incorrect notices<\/strong><\/p>\n It’s not enough to send a notice on time \u2014 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 A notice that’s missing a piece of that information, or based on outdated language, can create compliance exposure even if it went out on schedule.<\/p>\n The fix:<\/strong> Work from a standardized, legally compliant template rather than recreating notices from scratch each time. Regulations shift, so build in a regular review \u2014 an annual audit is a good baseline \u2014 to catch outdated language or missing elements before they turn into a problem.<\/p>\n 3. Losing track of premium payments<\/strong><\/p>\n 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.<\/p>\n The fix:<\/strong> Keep clear, consistent records of when payments are due, received, and posted. This doesn’t have to be sophisticated \u2014 even a well-maintained spreadsheet can dramatically cut down on errors \u2014 but it does have to be consistent. The goal is to always know exactly where each participant stands.<\/p>\n 4. Mishandling coverage terminations<\/strong><\/p>\n COBRA coverage can only be ended early under specific circumstances \u2014 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.<\/p>\n