COBRA Administration Services
Expert Continuation Coverage Management with Zero Compliance Risk
COBRA Administration from Cafe Health eliminates the complexity and risk of managing continuation coverage for departing employees and their families. As a specialized health benefits administrator serving employers nationwide from Phoenix, Arizona, we handle every aspect of COBRA compliance so you can avoid costly penalties and legal exposure. COBRA requires employers with 20 or more employees to offer temporary continuation of group health insurance to qualified beneficiaries who lose coverage due to termination, reduction in hours, divorce, or other qualifying events. Our comprehensive administration services include timely notifications, premium collection, qualifying event tracking, and complete regulatory documentation, all backed by our 24/7 responsive support and satisfaction money-back guarantee that ensures your complete peace of mind.
The High Cost of COBRA Non-Compliance
COBRA compliance is not optional, and the penalties for mistakes are severe. The IRS can assess excise taxes of $100 per day per affected individual with no maximum cap, while the Department of Labor can impose penalties up to $110 per day for notice violations. These fines accumulate rapidly and can reach hundreds of thousands of dollars for employers who miss notification deadlines, provide incorrect information, or fail to track qualifying events properly. Beyond financial penalties, non-compliance exposes your organization to lawsuits from affected individuals seeking coverage of medical expenses plus attorney fees.
Critical Compliance Point: Employers must notify COBRA administrators within 30 days of a qualifying event, and election notices must reach qualified beneficiaries within 14 days thereafter. Missing these deadlines by even a single day can trigger penalties and legal liability.
Cafe Health's COBRA administration removes this burden entirely. Our Phoenix-based team has processed thousands of COBRA events for employers across all 50 states, maintaining a perfect compliance record through meticulous attention to federal regulations, state continuation laws, and insurance carrier requirements. We stay current with regulatory changes, track complex eligibility rules, and ensure every notification meets legal standards for content, timing, and delivery verification. When you partner with Cafe Health, COBRA compliance becomes our responsibility, not yours.
Timely Notifications
Automated tracking ensures all COBRA notices meet strict federal deadlines. We handle initial notifications, election packets, premium invoices, and termination notices with documented proof of delivery
Premium Management
Seamless collection and processing of COBRA premiums with online payment options, grace period tracking, and automatic carrier remittance. Qualified beneficiaries pay directly, eliminating employer cash flow concerns.
Qualifying Event Tracking
Comprehensive monitoring of all events triggering COBRA rights including termination, hours reduction, Medicare entitlement, divorce, and dependent aging out. Our system captures events from multiple sources automatically.
Expert Support
Real human assistance available 24/7 for both employers and qualified beneficiaries. No automated phone trees or long wait times—just responsive, knowledgeable support when questions arise.
Comprehensive COBRA Services That Cover Every Detail
Cafe Health delivers end-to-end COBRA administration that addresses every compliance requirement and operational challenge. Our proven process begins the moment you onboard with us, importing your active employee census, benefits plan details, and insurance carrier information into our secure platform. We then establish automated data feeds from your HRIS or payroll system to capture qualifying events in real-time, ensuring no termination or status change falls through the cracks.
Initial and Ongoing Notification Management
When a qualifying event occurs, Cafe Health immediately generates compliant COBRA election notices that meet all Department of Labor content requirements. These notices clearly explain continuation rights, coverage options, premium amounts, payment procedures, and election deadlines in language qualified beneficiaries can understand. We send notices via USPS certified mail with return receipts and maintain electronic copies for audit purposes, providing ironclad documentation of your compliance with notification requirements.
Beyond initial election notices, we manage all subsequent communications including premium billing statements, grace period warnings, open enrollment materials, and coverage termination notices. Our digital platform allows qualified beneficiaries to access their information online 24/7, download forms, make payments, and submit questions through a secure portal. This self-service capability reduces administrative burden while improving the beneficiary experience during what is often a stressful transition period.
Premium Collection and Carrier Coordination
COBRA premium management requires precision to maintain coverage without interruption. Cafe Health collects premiums directly from qualified beneficiaries through multiple payment channels including online credit card processing, ACH transfers, and mailed checks. We apply strict grace period rules as mandated by law, provide timely payment reminders, and process refunds when beneficiaries overpay or coverage ends early due to new employment or Medicare eligibility.
Our team coordinates directly with insurance carriers to ensure continuous coverage for qualified beneficiaries who elect COBRA. We remit premiums to carriers on schedule, reconcile billing discrepancies, update dependent information as needed, and serve as the primary liaison for coverage questions. This carrier coordination prevents the common problem of coverage lapses due to premium processing delays or communication breakdowns between employers, beneficiaries, and insurance companies.
Duration Tracking and Extension Management
COBRA coverage periods vary based on qualifying events and subsequent developments. Standard continuation lasts 18 months for termination and hours reduction, but extends to 29 months if a qualified beneficiary becomes disabled during the first 60 days of COBRA coverage. Coverage can reach 36 months for beneficiaries who lose coverage due to divorce, legal separation, death of the covered employee, or a child aging out of dependent status. Additional qualifying events can extend coverage further under specific circumstances.
Cafe Health tracks these complex duration rules automatically, monitoring for disability determinations, Medicare entitlement, second qualifying events, and other factors that impact coverage length. Our system sends proactive notifications to beneficiaries approaching their coverage end date and coordinates transitions to alternative insurance options. We also administer state continuation laws for smaller employers not subject to federal COBRA, applying the correct rules based on your company size and location. For more information about complementary benefits administration, explore our ICHRA Administration and HRA/HSA/FSA Management services.
Seamless Integration with Your Benefits Ecosystem
COBRA administration does not exist in isolation—it connects to your entire benefits infrastructure and HR operations. Cafe Health integrates seamlessly with leading HRIS platforms, payroll systems, and benefits carriers to create a unified administration experience. Our platform receives automatic qualifying event notifications when employees are terminated or experience hours reductions, eliminating manual data entry and reducing the risk of missed COBRA triggers.
We also coordinate COBRA with your other employer-sponsored benefits programs. When employees have Health Savings Accounts, Flexible Spending Accounts, or Health Reimbursement Arrangements, these benefits may continue under COBRA with special rules that differ from medical plan continuation. Cafe Health manages these nuances expertly, ensuring compliance across your full benefits portfolio. Our Cafeteria Plan Setup and Compliance Review & Reporting services complement COBRA administration to provide comprehensive risk management and regulatory oversight.
Why Phoenix Employers Choose Cafe Health for COBRA
Based in Phoenix's dynamic business community, Cafe Health understands the challenges Arizona employers face managing employee benefits in a complex regulatory environment. We have helped hundreds of companies eliminate COBRA compliance risk while providing compassionate support to employees during career transitions. Our local presence combined with nationwide capabilities means you receive personalized service backed by enterprise-grade technology and processes.
What truly sets Cafe Health apart is our commitment to responsive, human-centered support. When a terminated employee calls with questions about their COBRA rights at 7 PM on a Friday, they reach a real benefits expert who can help immediately—not a voicemail or ticket system. When your HR team needs guidance on a complex qualifying event, we provide answers within minutes, not days. This level of service reflects our core belief that benefits administration should be effortless for employers and supportive for the individuals who depend on continuation coverage during difficult times. Experience the Cafe Health difference with our satisfaction money-back guarantee that demonstrates our confidence in delivering exceptional COBRA administration you can trust completely.
What is COBRA and who is required to offer it?
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law requiring employers with 20 or more employees to offer continuation of group health coverage to employees and their dependents who lose coverage due to qualifying events like termination, reduction in hours, or divorce. Covered individuals can maintain the same health benefits for up to 18 months (or 36 months in certain circumstances), though they must pay the full premium plus a 2% administrative fee.
What are the penalties for COBRA non-compliance?
COBRA non-compliance carries severe financial penalties. The IRS can assess excise taxes of $100 per day per affected individual, with no maximum cap. The Department of Labor can impose penalties up to $110 per day per violation for failure to provide required notices. Additionally, employers face potential lawsuits from affected individuals for benefits plus attorneys' fees. These penalties accumulate quickly, making professional COBRA administration essential for risk management and legal protection.
How quickly must COBRA notices be sent after a qualifying event?
Federal law mandates strict COBRA notification timelines. Employers must notify the COBRA administrator within 30 days of a qualifying event like termination or reduction in hours. The administrator then has 14 days to send election notices to qualified beneficiaries. Beneficiaries have 60 days from the notice date or loss of coverage (whichever is later) to elect COBRA. Cafe Health's automated system ensures all notices meet these critical deadlines to maintain full compliance and avoid penalties.
Does Cafe Health handle both federal COBRA and state continuation coverage?
Yes, Cafe Health administers both federal COBRA (for employers with 20+ employees) and state continuation laws that apply to smaller employers in states like Arizona, California, Texas, and others. We track which regulations apply to your specific situation based on company size, location, and plan structure. Our platform automatically applies the correct rules, deadlines, and coverage periods for each qualified beneficiary, ensuring seamless compliance whether you're managing federal mandates, state mini-COBRA laws, or both simultaneously.
Can Cafe Health integrate COBRA administration with our existing benefits platform?
Absolutely. Cafe Health's COBRA administration integrates seamlessly with your current HRIS, payroll systems, and insurance carriers. We connect with major platforms to receive automatic qualifying event notifications, synchronize employee data, and coordinate premium payments without duplicate data entry. Our API capabilities and file transfer protocols work with virtually any system, and our implementation team handles all technical setup. This integration eliminates manual processes, reduces errors, and provides a unified experience across your entire benefits administration ecosystem.
Eliminate COBRA Compliance Risk Today
Stop worrying about penalties and legal exposure. Let Cafe Health handle your COBRA administration with expert precision and compassionate support. Our Phoenix-based team is ready to protect your organization.
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