Premiums for active ee's are due to health carrier the 1st of ea. month for the coming month. Health carrier is saying COBRA premiums must also be paid by the first (in advance). Health carrier is telling me COBRA is an employer law and not subject to COBRA law allowing COBRA participants the 30 day grace period to make premium payments. I say the HC is subject to ERISA and therefore subject to COBRA law. Do I have to pre-fund COBRA premiums? Shouldn't HC allow COBRA premiums to be paid to them at the end of the grace period? They are terming COBRA participants at the first of each month. I'm conterned this will
backfire on us. Any suggestions; referral in regs to support our position? Thanks!

Although COBRA participants are allowed a 30-day grace period for premium payments, the carrier can request that they be paid the same time as your active employees. If it's not going to cause your company dire straits, just go ahead and slip the premium to the carrier and wait for the COBRA participant to pay you. Make sure you charge the extra 2% you can for administration and that should more than cover any interest you're losing out on.

If a COBRA participant doesn't pay and coverage is terminated, just take a credit on the following bill.