Managing COBRA continuation coverage is a key responsibility for benefits administrators, but misconceptions about the program can create confusion and compliance risks. COBRA (Consolidated Omnibus Budget Reconciliation Act) allows employees and dependents to maintain employer-sponsored health insurance after a qualifying event, but misinformation often complicates the process. In this article, we’ll debunk common COBRA myths and provide clarity to help you navigate compliance with confidence.

A frequent misconception is that COBRA coverage is prohibitively expensive. While enrollees do pay the full premium — including the portion previously covered by the employer — it is often more cost-effective than individual market plans. Additionally, some employees may qualify for alternative assistance programs or premium subsidies under the American Rescue Plan Act during specific periods. As a benefits administrator, it’s important to communicate these cost factors transparently to employees.

Many assume COBRA only applies to terminated employees, but it also extends to those who voluntarily resign, retire or experience a reduction in work hours affecting their eligibility for benefits. Additionally, dependents can continue coverage after qualifying events such as divorce, legal separation or the death of the covered employee. Understanding the full scope of COBRA eligibility ensures you provide accurate guidance to employees.

Employees often feel pressured to make a COBRA decision immediately after job loss, but they actually have a 60-day election period to decide. As a benefits administrator, you can help employees understand this timeframe and encourage them to compare COBRA against other healthcare options before making a choice.

COBRA continuation is available for up to 18 months in most cases. However, certain qualifying events — such as disability extensions or a second qualifying event — can extend coverage to 29 or even 36 months. Being aware of these extensions helps benefits professionals guide employees through their options effectively.

While COBRA allows employees to continue their employer’s health plan, benefits administrators should inform enrollees that plan offerings may change. If the employer modifies the health plan or switches carriers, COBRA participants must transition to the new plan. Keeping employees informed about potential changes is crucial for effective benefits management.

Your role in COBRA compliance is critical to avoiding penalties and ensuring employees receive accurate information. By debunking the common myths above, you can help employees make informed healthcare decisions while ensuring your organization remains compliant with federal regulations.