There are two grace periods when it comes to COBRA, usually referred to as the deadlines to send money:
A grace period of 45 days is allowed for the premium for the first full month of coverage beginning after the date of your election and for the retroactive period of coverage (from the date that your coverage ended until the date that you submit the election form).
A grace period of 30 days will be allowed for each subsequent monthly premium. This 30-day grace period does not apply to the premium for the first period of coverage beginning with the date of your election. The employer or plan may offer a grace period longer than 30 days.
If premiums are not paid by the first day of the period of coverage, the plan has the option to cancel coverage until payment is received and then reinstate coverage retroactively to the beginning of the period of coverage.
If the amount of the payment made to the plan is made in error but is not significantly less (an underpayment of 10% or $50, whichever is lessor) 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.
Depending on your health plan rules and your insurance carrier, they may suspend claims payments if your premium is not paid by the first or specified day of the month.
A common use the grace period would be if you wanted medical services covered retroactively, especially if they were in a waiting period on health insurance in a new employer. A qualified participant would send
in their election notice (but not their initial premium) at the end of the 60 day election period.
Then the participant would wait until the end of the 45 day election period to pay. During this 105 day grace period, they could be retroactively covered. If their new employer has a 90 day waiting period, that may cover them without actually having to pay for COBRA.
It's important to note, if you get canceled from COBRA for non payment or failure to send in the election paperwork, then have a gap in coverage of longer that 62 days, you may lose your HIPAA rights to guaranteed coverage under group health insurance.
Other important COBRA deadlines:
Notifying your plan administrator of a divorce or legal separation;
Becoming disabled within 60 days of COBRA enrollment
Returning the COBRA election paperwork within 60 days of mailing.
Craig Casey is an Writer, Coach, Blogger, Husband, and Former Health Insurance Agent helping people on the web since 1999 with their health insurance problems.
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