What happens if someone does not make the COBRA payment on time?

A grace period for payment of premiums must be provided which is the later of:

• Within 30 days after the beginning of the monthly coverage period; or
• The end of the grace period allowed for the employer's payment of premiums. (It should be noted that under California insurance law that there is a 31-day grace period.)

If a timely payment is made which is incorrect but "not significantly less" than the required premium, the amount paid is deemed to satisfy the premium requirement unless the plan notifies the qualified beneficiary of the deficiency and provides a reasonable period (safe harbor is 30 days) to make up the deficiency. What constitutes "significantly less" is