The COBRA Administration Process, Step by Step

9/4/2026

COBRA administration runs in eight stages: set up the plan's COBRA process, give the general notice at enrollment, capture qualifying events, notify the plan administrator, issue the election notice, process elections and premiums, administer the coverage while it lasts, and end coverage correctly. Each stage has its own deadline and owner. Most failures happen at the handoffs between the employer, the plan administrator, and any third-party administrator (TPA), so it helps to decide who owns each step before the first qualifying event.

Who Does What

Party	Main responsibilities
Employer (plan sponsor)	Decides whether the plan is subject to COBRA, tracks employment events, notifies the plan administrator of qualifying events, sets premiums with the insurer, and oversees any TPA.
Plan administrator	Named in the plan documents, often the employer itself. Sends the general and election notices, processes elections, and decides eligibility questions.
TPA	Performs whatever the service agreement delegates, usually notices, billing, and collections. Liability for compliance generally stays with the plan.
Insurer or claims administrator	Keeps continuation coverage active in its eligibility system and pays claims.
Qualified beneficiary	Reports certain events (divorce, loss of dependent status, disability determinations), elects coverage, and pays premiums on time.

Stage 1: Set Up Before You Need It

First confirm the plan is subject to federal COBRA (see which employers are subject to COBRA) or to a state continuation law. Then write down:

• Who the plan administrator is
• Whether a TPA is used, and exactly which tasks it performs
• How employment events will reach the administrator
• How premiums will be calculated and collected

Put this in the plan documents, the summary plan description, and the TPA agreement.

Stage 2: General Notice at Enrollment

When coverage begins, the plan administrator provides a general notice explaining COBRA rights to the employee and covered spouse. The deadline is within 90 days after plan coverage starts. Tie it to the enrollment process so it goes out automatically with new-hire and newly eligible enrollments, and keep proof that it was sent.

Stage 3: Capture Qualifying Events

A qualifying event is an event that causes a loss of coverage. The main events are:

• The employee's termination (other than for gross misconduct) or reduction in hours
• The employee's death
• The employee's entitlement to Medicare
• Divorce or legal separation
• A child losing dependent status

The employer sees the first group in its HR and payroll systems. The last two usually surface only if the family reports them. Build triggers into offboarding, status changes, and life-event processing, and be clear on how COBRA interacts with leave. See the COBRA qualifying events guide.

Stage 4: Notify the Plan Administrator

For events the employer controls (termination, reduction in hours, death, and Medicare entitlement), the employer must notify the plan administrator within 30 days. For divorce, legal separation, or a child losing dependent status, the qualified beneficiary must notify the plan within 60 days. The plan's procedures should say how to do that.

When the employer is also the plan administrator, these two steps merge, and the combined deadline to get the election notice out is 44 days.

Stage 5: Issue the Election Notice

Once notified, the administrator has 14 days to send the election notice to each qualified beneficiary. If an individual isn't entitled to COBRA, the administrator sends a notice explaining why instead. The notice-by-notice content requirements are a topic of their own. The process point here is that the clock starts when the administrator is notified, which is why stage 4 has to be reliable.

Stage 6: Elections and Premiums

• Each qualified beneficiary has at least 60 days to elect, measured from the later of the loss of coverage or the date the election notice is provided. Each beneficiary may elect independently.
• Initial premium. Due 45 days after the election. It covers the period back to the date coverage was lost, so it can be large.
• Later premiums. Usually due monthly, with a grace period of at least 30 days.
• Up to 102% of the applicable premium, or up to 150% during a disability extension. It is sometimes described as "the full premium plus an administrative fee". The extra 2% is that fee, and the plan cannot add a separate charge on top.
• A payment short by no more than the lesser of $50 or 10% must be accepted as full payment unless the plan notifies the beneficiary and allows 30 days to make up the difference.

Billing and collections are where TPAs earn their fee. See COBRA premium payment management.

Stage 7: Administer Coverage

Continuation coverage has to be identical to what similarly situated active participants receive. In practice:

• Include COBRA enrollees in open enrollment.
• Apply plan design and rate changes to them.
• Allow mid-year changes for new dependents.
• Coordinate with the insurer so claims aren't denied while payment is pending within a grace period.

Track extensions during this stage. A disability determination can extend an 18-month period to 29 months. A second qualifying event, such as the former employee's divorce or death, can extend coverage for the spouse and dependents to 36 months. Both depend on timely notice from the beneficiary.

Stage 8: End Coverage

Coverage ends when the maximum period runs out (18, 29, or 36 months depending on the event) or earlier for a permitted reason, such as nonpayment or the beneficiary obtaining other group coverage after electing. Early termination requires its own notice and has pitfalls of its own; see early termination of COBRA coverage. When coverage ends, make sure the insurer's eligibility file is updated and any premium paid for the period after coverage ended is refunded.

Recordkeeping Across All Stages

For each qualified beneficiary, the file should show:

• The qualifying event and its date
• The date the administrator was notified
• The notices sent, with dates and addresses
• The election
• Every premium payment with its sent date
• Extensions and the notices that supported them
• The end date and reason

Our guide to COBRA administration mistakes shows what happens when any of these is missing.

Frequently Asked Questions

Can the employer be the plan administrator?

Yes, and many small and mid-sized employers are, even when a TPA does the day-to-day work. Check the plan documents.

Does using a TPA shift COBRA liability?

Not to participants. It shifts the work. Contract terms decide whether the plan can recover costs from the TPA after an error.

How long does the whole process take for one event?

From the qualifying event to the end of the election period can take roughly 104 days (30 + 14 + 60) when the employer and administrator are separate, before any premium is due. Coverage can then run 18 to 36 months.

Do we need written COBRA procedures?

The plan must have reasonable procedures for how beneficiaries give notice of events. Writing down internal procedures as well is the best way to show that each stage was handled correctly.

Related Reading and Training

See the COBRA best practices for employers and the COBRA compliance FAQs. For full training on each stage, enroll in the COBRA training and certification program.