COBRA Info

[mskeg]

What is the name of your state? New York

If you receive a monthly invoice for your COBRA payment from a former employer, can they state on it anything about it being due in a certain amount of days from the date issued? Can they charge you extra daily charges if it is not paid by that date? As I understand they don't have to send a notice, but this is their procedure. I also understand that as long as it is paid between the 1st and 31st (or end of month) that coverage continues. Invoices to vendors or such I can understand charging late fees, but for COBRA payments? Any information would be greatly appreciated. Thank you.

 

[moburkes]

You'd be wise NOT to pay COBRA premiums late.

 

[Betty]

Right - pay your COBRA premiums on time & you will not have to worry about late fees.

 

[mskeg]

I do pay them on time, no doubt in that, I need the coverage. My question wasn't about paying them on time or not, it was can they charge you daily late fees. They give a 15 day from invoice date due date until they charge a daily percentage for every day after 15 days the payment is late. I'd like to know if that is legal. If I am understanding the COBRA regulations correctly, I have 30 days to pay. I don't see anything about charging a daily late fee after 15 days, if I have 30 days to pay why should I be charged late fees after 15 days from the invoice date. I'm not a vendor, I do not have a contract with them. I go by what the COBRA law tells me....30 days. I've been paying them on time and will continue to do so. Legally can they state late or charge late fees is my question. Thank you.

 

[cbg]

They can STATE anything they like. Until you have actually been charged a late fee, no laws have been violated. And as you say you always pay on time, it becomes a moot point.

 

[mskeg]

Please don't take me wrong, I'm just trying to understand and I appreciate your advice.

You are saying that they can state what they like, ok got it. What I don't understand is what if I didn't pay the bill by their invoice due date and was charged a late fee that would be illegal? Yes you are correct the point is moot cause I do pay on time, but I would like to know the "what if" factor. COBRA says "Premiums for successive periods of coverage are due on the date stated in the plan with a minimum 30-day grace period for payments". The information they gave me when I left was that my payments were due by the 20th of each month, yet they keep sending me bills that have been paid for within the first week of the month (ie 1st - 4th). I have to do that because of the invoices they send me state a late fee after 15 days, which I don't want to get charged for, so I pay them before the 20th. So they are not sticking to their original plan.

If I didn't receive an invoice and pay it monthly, 30 days as COBRA says, I'm good, but since they send me an invoice, I HAVE to pay it by their due date and could be charged a late fee. Why do they have the right to charge me a late fee when I have 30 days to pay it, no matter what? I mean 30 days is 30 days. If they send me an invoice for my COBRA August payment dated July 20 and give me 15 days to pay and I pay it by August 3rd I'm covered. If I pay it any time after that day, I get charged a daily late fee. I can understand them cancelling my coverage until I pay and if paid within the 30 day limit it will be reinstated, but why should they be making money off a late payment when it's not costing them anything.

 

[cbg]

IF you did not pay your bill on time AND IF your employer charged you a late fee, you would be within your rights to complain to the US DOL. How much notice they would take of it and what, if any, action they would take is not something I'm prepared to address.

One caveat:

COBRA rates are set by law. The employer may charge you up to 102% of the cost of the insurance to them. IF they are not opting to charge the additional 2% AND IF that 2% is the late fee, that is LEGAL. If the charge plus the late fee exceeds 102% of the cost of the insurance to them, that is a violation of the COBRA statute.

They are not obligated to send notices at all. Those employers who do, generally have it set up on an automated system of some sort, with no provision to hold back an invoice for those who may have already paid. Indeed, the individual who sets the invoices in motion may not even have access to the information as to who has already paid.

No one is saying they have a right to charge you a late fee. It is true that the COBRA statue offers you a 30 day grace period. That does NOT make it okay to pay beyond the due date, and the US DOL will tell you that. It is your responsibility to pay on time, whether they send invoices or not; whether the employer (rightly or wrongly) threatens a late fee or not. The fact that the statute permits a grace period does not mean you are free to pay whenever you like within that period.