COBRA Coverage Denied or Disputed? Know Your Rights

Losing a job or experiencing another major life change can mean losing your employer-sponsored health coverage. COBRA continuation coverage is supposed to be your bridge — but the rules are strict, the timelines are tight, and when employers or plan administrators make mistakes, you can be left holding the bill for care you thought was covered.

Here's what you need to know to protect your COBRA rights.

What Is COBRA?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires that employers with 20 or more employees offer continuation of group health coverage to employees and their covered dependents who would otherwise lose coverage due to a qualifying event.

Qualifying events include:

• Voluntary or involuntary termination of employment (other than for gross misconduct)
• Reduction in hours that causes loss of coverage
• Employee becomes entitled to Medicare
• Divorce or legal separation from the covered employee
• Death of the covered employee
• Dependent child loses dependent status

COBRA coverage can last up to 18 months for employment-related events, and up to 36 months for other qualifying events (divorce, dependent status loss, death, Medicare entitlement).

The 60-Day Election Window

After a qualifying event, you have exactly 60 days from the later of (a) the date coverage is lost or (b) the date the employer sends you the COBRA election notice — to elect COBRA coverage.

This is a hard deadline. If you miss it, you lose your COBRA rights entirely. However, if the employer failed to send a proper notice, the clock may not have started running — which is one of the most powerful protections COBRA gives you.

The 45-Day Premium Payment Window

Once you elect COBRA, you have 45 days from the date of your election to pay the first premium. After that initial payment, monthly premiums are due on the first of each month, with a 30-day grace period for payment.

If you fail to make a timely premium payment, your COBRA coverage can be terminated retroactively to the date the premium was due.

Critical point about retroactive coverage: If you elect COBRA and pay the first premium within 45 days, your coverage is retroactive to the date it originally terminated. This means if you received medical care during the gap between losing coverage and electing COBRA, those services should be covered — as long as you subsequently elected and paid.

The Employer's Notification Duties

This is where most COBRA disputes originate. The plan administrator (typically the employer) has specific notification obligations:

General notice: When you first become covered by the plan, the plan must give you a general COBRA notice explaining your rights. This is usually included in your enrollment materials.

Election notice: When a qualifying event occurs, the plan administrator has 14 days (if the employer is the plan administrator) or 30 days (if a TPA is the administrator) to provide you with an election notice after being notified of the qualifying event. The employer itself has 30 days to notify the plan administrator of an employment-termination qualifying event.

If the employer fails to provide the election notice within the required timeframe, the 60-day election window does not begin until the notice is actually provided. Courts have held employers liable for benefits costs when improper COBRA notice led to a participant going without coverage.

When COBRA Coverage Is Denied or Terminated

Denial of election. If your plan administrator refuses to honor your COBRA election — claiming the election was late, the event doesn't qualify, or you weren't covered — review the timeline carefully. If the notice was late, your election deadline may not have passed.

Termination for non-payment. If coverage was terminated because of a missed premium, check whether:

• Your payment was within the 30-day grace period
• You received proper notice of the premium due amount
• The plan applied your payment correctly

Claims denied after COBRA election. If you elected and paid COBRA but a claim is denied, your COBRA plan is the same plan as your former employer's plan — so all the same ERISA and claim appeal rights apply.

How to Dispute a COBRA Problem

1. Document the timeline. Note when the qualifying event occurred, when you lost coverage, when you received the election notice (if you did), when you elected, and when you paid.

2. Request the election notice and General COBRA Notice from your former employer. If you never received them, that's a violation.

3. File a DOL EBSA complaint. COBRA is enforced by EBSA. If your employer failed to provide timely notice, EBSA can investigate and the employer may be liable for excise taxes and employee losses. File at dol.gov/ebsa or call 1-866-444-3272.

4. Consider private legal action. ERISA §502(a) allows participants to sue for benefits due and for statutory penalties for COBRA notice failures. Courts have awarded significant damages where notice violations caused participants to incur uninsured medical bills.

5. Check state mini-COBRA laws. Many states have continuation coverage laws that apply to smaller employers (fewer than 20 employees) or extend coverage periods. These state laws may apply if your plan is fully-insured rather than self-funded.

Fight Back With ClaimBack

Whether you're dealing with a missed COBRA notice, a disputed election, or claims being denied on your continuation coverage, you have rights worth fighting for. ClaimBack helps you navigate COBRA disputes and ERISA appeals with a clear strategy.

Start your appeal at ClaimBack

Related Reading:

• How to Write an Insurance Appeal Letter
• Internal vs. External Insurance Appeal
• Common Reasons Insurance Claims Are Denied