When does the 18, 29, or 36 month COBRA period actually begin?

Since we all know that under COBRA there is no lapse in coverage between the date coverage is terminated and the date COBRA begins, this would seem like a pretty simple one to answer.

Fact is, many COBRA administrators mistakenly provide more COBRA than is required (or allowed by the insurance company), and that could spell trouble down the line.

So, when does the "18 month clock" start?

The maximum coverage period actually begins on the date of the qualifying event, not the date coverage is lost.

EXAMPLE:

Jimbo Smith gets fired on August 11. According to the plan, his health coverage will continue through the end of the month (August 31st in this case). Jimbo elects COBRA and begins paying the full cost of his health insurance as of September 1. So, he gets 18 months of COBRA beginning September 1st, right?  Not exactly.

According to COBRA's regulations, the maximum COBRA coverage period begins on the date of the qualifying event, even if the loss of coverage is delayed. In other words, in our example the 18 month clock begins on the date of termination (August 11).

Why is this such a big deal? Think about it this way. The company's COBRA administrator mistakenly starts Jimbo's 18 month COBRA clock on September 1, instead of August 11 as required by the carrier. So Jimbo gets a couple of extra weeks of coverage. No big deal, right? Probably not, but let's say he has a huge claim 18 months and 1 week later (when his COBRA should have already expired). Is there any chance the carrier might take a look to make sure Jimbo was eligible for coverage at this point? Might they ask the employer when Jimbo was terminated from employment? Might they ask why Jimbo was allowed more COBRA coverage than is allowed by the carrier?

Planning Pointer

Ask your carrier if the maximum COBRA period begins on the date of the qualifying event or date coverage is lost and complete COBRA notices accordingly.

P.S. COBRA allows plans to begin the "COBRA clock" on the date coverage is lost if the plan contains language to that effect.

From the 1999 Final COBRA Regulations

Q–1: How long must COBRA
continuation coverage be made available
to a qualified beneficiary?

A–1: (a) Except for an interruption ofcoverage in connection with a waiver, as in Q&A–4 of § 54.4980B–6,
COBRA continuation coverage that has elected for a qualified beneficiary extend for at least the period
beginning on the date of the qualifying and ending not before the earliest of the following dates—

(1) The last day of the maximum required period under section 4980B(f)(2)(B)(i) (the maximum
coverage period) and, if applicable, section 4980B(f)(8) (relating to the optional extension of required periods
in a case where coverage is lost after the date of, instead of on the date of, the qualifying event);

(2) The first day for which timely payment is not made to the plan with respect to the qualified beneficiary (see
Q&A–5 in § 54.4980B–8);

(3) The date upon which the employer or employee organization ceases to provide any group health plan
(including successor plans) to any employee;

(4) The date, after the date of the election, upon which the qualified beneficiary first becomes covered under
any other group health plan, as described in Q&A–2 of this section; and

(5) The date, after the date of the election, upon which the qualified beneficiary first becomes entitled to
Medicare benefits.
3 of this section.