Most COBRA coverage disputes start as a premium payment nobody reconciled.
A check that is late, short or applied to the wrong month does not look like a problem until a claim is denied months later. We set up premium billing and collection so each payment is measured against the rules the day it arrives, and we bill retirees and other continuants outside COBRA the same way.
The grace periods are generous. The records have to be exact.
COBRA premiums can be up to 102% of the plan’s cost, or 150% during a disability extension, and the payment rules favor the beneficiary. The employer’s protection is a clean record.
The First Payment
The initial premium cannot be required earlier than 45 days after the election, and it can cover every month back to the loss of coverage. A late election paid late can still be on time, which is why we track both dates, not just the check.
The Monthly Grace Period
Each later payment is timely if made within 30 days after the first day of the coverage period. We apply each payment to a named period, so there is never a question which month a check was meant to cover.
Short Payments
A payment short by no more than the lesser of $50 or 10% of the amount due is treated as full payment unless the plan sends notice and allows 30 days to cure. We send that notice promptly, because silence turns the shortfall into a gift.
Rate Changes
COBRA rates follow the plan’s rates and usually change at renewal. We update billing when the plan year turns over, so beneficiaries are billed the new rate from the first month rather than corrected later.
Terminating for non-payment has to be as timely as the payment rules are generous.
When the grace period ends without payment, coverage can end back to the start of the unpaid period. The dispute comes when claims keep getting paid after that date because the carrier or claims payer was never told.
Tell the Carrier on Time
We send the termination to the carrier or claims payer as soon as the grace period closes. A late termination leaves claims paid for someone no longer covered, and recovering them is harder than preventing them.
Hold Claims During Grace
Claims incurred during a grace period can be held until payment arrives rather than paid and reversed. We coordinate that practice with the carrier, so providers get one consistent answer.
Reconcile Every Month
We reconcile collections against enrollment and against what the carrier or claims payer billed each month, so the premium collected matches the people covered and gaps surface in weeks, not at year-end.
Retirees and other continuants need the same discipline without the same rules.
Direct billing outside COBRA follows your plan’s terms, not the federal timeline. That makes the written terms more important, not less.
Retiree Contributions
Retirees who pay their share are billed on the schedule your retiree policy sets. We make sure the policy says what happens when a payment is late, because a rule written after the first missed payment looks arbitrary.
Unpaid Leave
Employees on unpaid leave who keep coverage still owe their share. We bill them directly on terms you set, so leave does not quietly become free coverage or an unexpected termination.
The Move to Medicare
Continuants and retirees who become eligible for Medicare often need something different from the plan. We flag those dates so billing and coverage change together rather than a month apart.
What employers ask about COBRA billing.
Can we charge less than the maximum?
Yes. Many employers charge less than the 102% ceiling or subsidize COBRA in a severance package. It should be a decision made on purpose and written down, because it sets an expectation for the next departure.
What if a payment arrives after the grace period?
Coverage has ended, and accepting the late payment can be read as reinstating it. We return late payments under a written procedure, and any exception is decided with counsel.
How do we know where the money went?
Every payment is recorded against a named beneficiary and period and reconciled monthly to enrollment and to the carrier’s bill. You see each payment’s path, not a single remittance total.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
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