COBRA Series: COBRA Basics and Notices

July 2026

Daniel Finnegan, Benefits Compliance Specialist

This is the first of a series of articles that will focus on the various aspects of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), designed to help employers better understand their compliance obligations for COBRA administration. Failure to follow COBRA regulations can result in excise taxes, fiduciaries can be held personally liable, and there is the possibility of civil penalties and lawsuits. This series follows our Back to Basics: COBRA and its Complexities webinar that was conducted on June 24, 2026, and is intended to supplement that webinar by providing clients and colleagues with additional resources to assist them with their COBRA compliance obligations. This article focuses on which employers and plans are subject to COBRA and the notices required to maintain compliance.

COBRA

COBRA is a complex law that allows individuals who have lost coverage under a group health plan to continue that coverage after they have experienced a COBRA qualifying event. COBRA qualifying events include termination of employment (voluntary or involuntary), reduction of hours, death of an employee, divorce, a child’s loss of dependent status under the plan, entitlement to Medicare (conditional) and employer bankruptcy (retiree plans). The maximum COBRA benefit period can range from 18 to 36 months (extensions available under specific circumstances) depending on what qualifying event the employee experienced.

COBRA applies to virtually all employer-sponsored group health plans through ERISA, the Internal Revenue Code (“IRC”) and the Public Health Service Act (“PHSA”) and includes private-sector employers, non-federal state and local governmental employers that employ at least 20 employees on more than 50% of their typical business days during the preceding calendar year. COBRA does not apply to small employers (those with fewer than 20 employees), church plans, or Federal government plans. However, many states have implemented their own versions of COBRA called mini-COBRA or state continuation, that will require small employers to offer COBRA-like benefits. Benefit plans that provide medical care to participants or beneficiaries directly or through insurance are subject to COBRA. This may require employers to examine their wellness plans and employee assistance programs to determine if they are providing any forms of medical care. If it’s determined that they are providing medical care, they would be subject to COBRA.

COBRA notices

COBRA requires employers to send a variety of notices to plan participants and COBRA-qualified beneficiaries. Each notice has its own timeframe requirements that must be adhered to. The required notices include the COBRA general/initial notice, COBRA election notice, COBRA notice of unavailability, and COBRA termination notice.

The general/initial notice must be supplied to the covered employee and spouse within the first 90 days of coverage. The notice should include a general description of continuation of coverage including who are qualified beneficiaries, what are qualifying events, maximum periods of coverage, and payment of COBRA premiums.

The election notice must be furnished to employees and dependents who have experienced a COBRA qualifying event. The timing for the election notice depends on who administers COBRA. Employers who are the COBRA administrators have 44 days from the date of the qualifying event to send the qualified beneficiary(ies) the election notice. Employers who use a third-party COBRA administrator have 30 days from the date of the qualifying event to notify the administrator, who then has 14 days to send the election notice to the qualified beneficiary(ies).  Once the election notice is received, the qualified beneficiary has 60 days from the later of (a) the date coverage would have ended or (b) the date of the election notice, to decide if they will be electing COBRA coverage. It is important to note that each qualified beneficiary has an independent right to elect COBRA. However, an employee may elect COBRA on behalf of all qualified beneficiaries.

The notice of unavailability of COBRA coverage must be sent when an individual experiences a qualifying event but is not entitled to COBRA coverage (or an extension). This can happen when the person who requests COBRA coverage was not enrolled in the employer’s health plan at the time of the event or the employer is not subject to COBRA. The COBRA termination notice should be sent before the end of the maximum coverage period when COBRA coverage is set to expire or if a qualified beneficiary becomes covered under another employer-sponsored group health plan (through new employment of themselves or spouse).

A notice of COBRA premiums short by an insignificant amount is not a required notice; however, sending it is a best practice. This notice is sent when a COBRA premium is received. However, the premium amount is less than the amount the plan requires to be paid for a period of coverage. This allows the qualified beneficiary to make up the difference of the premium owed before their COBRA coverage is terminated.

For employers who self-administer COBRA rather than working with a third-party administrator, the Department of Labor (“DOL”) provides model notices that can be used to help satisfy these notification requirements. These model notices, available on the DOL’s website, cover the general/initial notice and the election notice, and can serve as a helpful starting point for employers to build a compliant COBRA notification process. Employers using these models should still review and tailor them to reflect their specific plan terms and administrative procedures.

Employer action items

• Review benefit plans, identifying those that are subject to COBRA coverage (i.e. those offering medical care).
• Review policies and procedures for sending COBRA notices, to ensure that they are sent based on specific circumstances and within COBRA-required timeframes.

Additional information and resources

• An Employer’s Guide to Group Health Continuation Coverage Under COBRA
• COBRA Continuation Coverage
• COBRA Continuation Coverage Questions and Answers