My Employer Cancelled My COBRA Because I Was Late With My Payment. How Can I Get Them To Reinstate It?

Honestly, you may not be able to. It depends on whether this was your first payment or a subsequent payment, how late you were with it and whether your payment was complete. Let’s look at a few different scenarios. In all cases, the date that your payment is postmarked is the date that the law considers you to have paid.

First premium payment: If this is your first payment, you have 45 days from the day you elected COBRA to make payment. As long as payment is made within this 45-day period, your COBRA will continue in force. If you pay outside this 45-day period, you are considered to have forfeited your COBRA (i.e., lose your continuation rights). Your ex-employer may, if they so choose, accept your late check and implement COBRA anyway, but if the payment is postmarked more than 45 days after the election of COBRA, it’s up to your former employer whether to accept it or not.

Later payments: If this is a subsequent payment, the grace period mandated by law is 30 days. If, as an example, the COBRA premium is due on April 1, under the law your ex-employer must give you a 30-day grace period. So to all practical purposes you’re all right as long as your payment is postmarked sometime during the month of April.

If the payment is postmarked May 1 or later, however, then once again it is up to your former boss whether or not to accept it. He or she may legally, in that instance, return your payment to you and cancel your coverage retroactive to April 1. He may offer a grace period of more than 30 days, but the law will not compel him to do so.

Incorrect premium payment: There is one other possibility to keep in mind, and that is the possibility of a short payment. A payment made for less than 100% can legally be considered not to have been made, unless the difference is “insignificant”– $50 or 10%– whichever is less. In that case, you must be notified of the shortfall by your ex-employer and given a reasonable amount of time to pony up the difference. The IRS has determined that 30 days is reasonable. Once again, if your payment is postmarked more than 30 days after the notice that your payment was short, your former boss is not obligated to accept it.

The law does not require your employer to provide monthly billing statements with the exception noted above. It is your responsibility to know the payment due date and make the premium payments in full, on time.

Case Studies: COBRA Payment Issues