COBRA Continuation Coverage: The 60-Day Window, the Subsidies, and What Has Changed
COBRA has not been the same since the 2021 ARP subsidies expired. Here's what current employers actually need to send, when, and what the recent litigation focuses on.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires group health plans sponsored by employers with 20+ employees to offer continuation coverage to "qualified beneficiaries" who would otherwise lose coverage due to a "qualifying event." Three decades in, COBRA litigation in 2024-2025 has focused almost entirely on notice content and timing — the substantive coverage rules are largely settled.
The qualifying events
Coverage continues for between 18 and 36 months depending on the event:
- 18 months — termination of employment (except for gross misconduct) or reduction in hours
- 29 months — disability extension under specific Social Security disability rules
- 36 months — divorce or legal separation, employee's death, employee Medicare entitlement, loss of dependent-child status
The DOL's COBRA reference page publishes the detailed event matrix and the model notices.
The notice timeline that the litigation focuses on
Two notices matter:
- General Notice — must be provided to each employee and spouse within 90 days of when group health coverage begins
- Election Notice — must be provided within 14 days of receiving notice of the qualifying event (44 days where the employer is the plan administrator)
The election notice content is heavily prescribed. The 2014 model notice from the DOL is the safe-harbour template, but the 2022 ACA marketplace updates require modernised language about subsidised marketplace alternatives. Class actions in 2023-2024 have focused on:
- Notices missing the marketplace alternative language
- Notices in form-letter English where the plan population is materially non-English-speaking
- Notices addressed only to the employee where the spouse is a separate qualified beneficiary
The 60-day election window
The qualified beneficiary has 60 days from the later of (a) the date coverage would otherwise end, or (b) the date the election notice is provided, to elect continuation coverage. The first premium payment is due within 45 days of the election. Coverage is retroactive to the day after the qualifying event.
The retroactive nature of COBRA election creates the cash-flow risk that makes proper notice timing matter operationally — a beneficiary can wait 105+ days before paying anything while still receiving full coverage. Where the plan sponsor self-funds, the gap is material.
The 2021 ARP subsidy and what came after
The American Rescue Plan Act provided a 100% COBRA premium subsidy for involuntarily terminated employees between April 2021 and September 2021. The subsidy expired but the operational footprint did not — payroll vendors that retro-billed the IRS for the COBRA premium tax credit are still processing audit trails. New employer-side subsidies are not currently legislated.
Where HR systems help
A properly configured HR/benefits stack should:
- Auto-generate the general notice on benefit enrolment
- Auto-generate the election notice on the qualifying event with current DOL model language
- Track election windows and premium-payment deadlines per beneficiary
- Hold a tamper-evident audit log of every notice sent
For the broader benefits administration picture, see our COBRA glossary entry.