When is the 1st COBRA payment due, and is there a grace period?

When COBRA continuation coverage is elected, the plan cannot require the individual to send any payment with the election form. The plan can require, however, that the initial premium payment be made within 45 days after the date of the COBRA election (that is the postmark date of  the election form). Failure to make any payment within that period of time allows the plan to terminate COBRA.

The plan can set premium due dates for successive periods of coverage (after the initial payment), but it must give allow the individual the option to make monthly payments, and it must allow for a 30-day grace period for payment of any premium.

The plan administrator should be aware that if payments are not made by the first day of a period of coverage, but the premium is received within the grace period for that period of coverage, the plan has the option to cancel 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 will result in a termination of COBRA coverage.

Short Payments

If the amount of a payment made to the plan is wrong, but is not significantly less than the amount due (the lesser of 10% of the premium or $50), the plan is required to notify the individual 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.