posted at 9/21/2011 4:57 PM EDT on Workforce Management
In Response to COBRA:
We ask that COBRA payment be submitted the 10th of month when they signed up. But some do not pay for 60 days. How do you know when to cancel?
Posted by beking1
"...to make an initial premium payment within 45 days after the date of
your COBRA election (that is the date you mail in your election form,
if you use first-class mail). Failure to make any payment within that
period of time could cause you to lose all COBRA rights. The plan
can set premium due dates for successive periods of coverage (after
your initial payment), but it must give you the option to make monthly
payments, and it must give you a 30-day grace period for payment of
You should be aware that if you do not pay a premium by the first day
of a period of coverage, but pay the premium within the grace period
for that period of coverage, the plan has the option to cancel your
coverage until payment is received and then reinstate the coverage
retroactively back to the beginning of the period of coverage. Failure
to make payment in full before the end of a grace period could cause
you to lose all COBRA rights.
If the amount of a payment made to the plan is wrong, but is not
significantly less than the amount due, the plan is required to notify
you of the deficiency and grant a reasonable period (for this purpose,
30 days is considered reasonable) to pay the difference. The plan is not
obligated to send monthly premium notices."
There is at least a 30 day grace period (which usually coincides with the end of the current month's coverage). Your carrier should understand this and should be willing to retro drop if the former employee doesn't pay within the first 30 days. It might be a manual drop rather than something you can do online electronically though (even with the large carriers such as UHC or BCBS)
By waiting past that 30 days, you are extending them a greater benefit. How does your carrier deal with drops after 30 days late? Is the employer having to pay the extra month's premium or are they will to backdate it 60+ days? I would start with making sure that your procedure matches the carriers, so that the employer is not losing money in the process.