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Why is the first COBRA payment so expensive?

COBRA coverage begins on the date that coverage is lost (usually the first of the month following termination). Employees who enroll in COBRA later in their election window (which begins on the date of coverage loss) will have coverage retroactively to that date, and will need to pay for retroactive coverage. In some cases, this cost may include up to 2 months of coverage.

For example, Federal COBRA has an election window of 60 days. Let's assume the following:

  • The employee is terminated on September 27th, and their coverage extends through the end of that month.
  • COBRA coverage would begin on October 1st (first of the month following termination).
  • The employee has 60 days from October 1st to elect COBRA. However, their COBRA effective date of October 1st stays the same regardless
  • The employee elects COBRA on November 15th, and is responsible for paying retroactively for coverage in October and November.
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