Helpside works with Arizona employers on the day-to-day HR and benefits details that can easily get overlooked—especially when it comes to compliance. One area that often causes confusion is the Consolidated Omnibus Budget Reconciliation Act, commonly known as COBRA.
COBRA governs how and when employers must offer continued group health coverage after certain employment or life events. While the rules can feel complex, understanding the basics is essential to avoiding costly penalties and compliance issues.
Below are the key things Arizona employers should know about COBRA compliance.
Who Qualifies for COBRA Coverage
Employees who qualify for COBRA are those who were enrolled in a group health plan before experiencing a qualifying event that caused them to lose coverage.
In many cases, coverage may also extend to:
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An employee’s spouse
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An employee’s dependents
Eligibility depends on both the employee’s prior coverage and the specific qualifying event.
What Counts as a Qualifying Event
A qualifying event is an occurrence that causes a loss of group health coverage.
Qualifying events for employees include:
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Termination of employment (for reasons other than gross misconduct)
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Reduction in work hours that results in loss of benefits
Qualifying events for spouses or dependents may include:
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Termination or reduction of hours of the covered employee
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The covered employee becoming entitled to Medicare
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Divorce or legal separation
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Death of the covered employee
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A dependent losing eligibility (for example, aging out at age 26)
Each event triggers specific COBRA obligations and timelines.
COBRA Notice Requirements
One of the most critical aspects of COBRA compliance is sending required notices on time. Missing a deadline can lead to penalties, even if coverage is ultimately offered.
Common COBRA notices include:
Initial Plan Information
Employers must provide information about the group health plan, including eligibility and benefit details.
General Notice
This notice informs covered employees of their COBRA rights and must generally be sent within 90 days of enrolling in the health plan.
Qualifying Event Notice
Sent after a qualifying event occurs—typically within 30 days—to notify the plan administrator.
Election Notice
Sent within 14 days after the qualifying event notice, outlining COBRA coverage options, costs, and deadlines.
Additional notices may be required in certain situations, such as early termination of coverage or extensions.
How Long COBRA Coverage Lasts
The length of COBRA coverage depends on the qualifying event.
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Most events allow for 18 months of coverage
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Certain events allow for 36 months
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Coverage may be extended in limited cases, such as disability or a second qualifying event
COBRA coverage may end early if:
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Premiums are not paid on time
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The employer stops offering group health coverage
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The individual becomes covered under another group health plan
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Termination occurred due to qualifying misconduct
Employer Responsibility and Compliance
While many benefits providers or brokers assist with COBRA administration—or refer employers to third-party administrators—the responsibility for compliance ultimately rests with the employer.
This includes ensuring:
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Notices are sent accurately and on time
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Coverage is offered correctly
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Records are properly maintained
As a professional employer organization (PEO), Helpside supports Arizona businesses by helping manage benefits administration, documentation, and compliance processes that intersect with COBRA obligations.
Staying Compliant With COBRA
COBRA compliance can feel overwhelming, but understanding the core requirements makes it more manageable. Staying informed and organized helps protect your business while ensuring employees receive the benefits continuation they’re entitled to.
Download GuideCurious how we can help with compliance? Call Helpside today for your Free 15-Minute Benefits Audit: 1-800-748-5102
Further Reading:
Navigating Compliance with a Multi-State Workforce: What Employers Should Know