Automating COBRA Eligibility and Billing: What to Look for in a System

If you're still managing COBRA manually — or you're relying on a vendor who keeps you in the dark — you're taking on a lot more risk than you need to.

COBRA compliance is black-and-white. Deadlines matter. Notices matter. Records matter. But the reality for most union health plans or TPAs? You're juggling multiple employers, hour banks, eligibility rules, and members whose status can change weekly. And your systems aren't built for it.

This post is here to help you figure out what a real COBRA automation system looks like — and what to look for if you're shopping for something better.

Why COBRA Is Especially Messy for Union Health Plans

The rules are strict no matter what. But if you're managing union benefits, you know how much messier it gets:

You're not just tracking employee status — you're tracking hours worked across jobs and employers.
Eligibility depends on hour banks, not full-time vs. part-time.
Members can go inactive and come back in a single month.
Employer remittances aren’t always on time, and when they're wrong, someone has to catch it.

In that environment, tracking COBRA manually — or across disconnected systems — is just asking for a notice to be missed, a payment window to lapse, or a premium to be miscalculated. That’s where the real risk comes in.

What Automation Actually Means

"Automation" gets thrown around a lot, so let's be clear.

A system that automates COBRA should do more than just print a template notice when you tell it to. It should:

Detect qualifying events (termination, reduction in hours, etc.) based on live eligibility data
Generate and send notices on the required timeline, with tracking
Calculate premiums accurately, even as plan rates change
Track billing, grace periods, and payments without manual follow-up
Log all of this in a clear audit trail

That’s what actual automation looks like. Not a patchwork of reminders and manual entries — a system that tracks eligibility, generates notices, and manages billing in the same place.

What to Look For in a COBRA System

Here’s the shortlist of what you should demand from any COBRA system, especially if you're handling union hour banks or Taft-Hartley plans:

✅ Must-Haves:

Automatic tracking of COBRA-qualifying events (driven by eligibility logic, not just HR input)
Integrated notice generation with time-stamped logs
Flexible rules engine that works with hour banks and contribution-based eligibility
Digital member self-service for elections and payment
Built-in billing and collections — not just exported CSVs

💡 Nice-to-Haves:

Text/email reminders for late payments
Integrated employer remittance feeds
Custom grace period handling
Support for state continuation plans if you're in one of those states
Real-time reporting and exportable compliance logs

What to Watch Out For (Red Flags)

Just as important as what to look for — here’s what should raise alarms:

Systems that can’t handle hour bank eligibility
Manual handoffs between eligibility and COBRA billing
No digital delivery or audit trail for notices
COBRA “add-ons” that live outside your main system (which means more risk and rework)

If your current setup relies on someone exporting data and someone else manually preparing and sending notices — that’s not automation, and it's definitely not compliant enough for how fast DOL penalties stack up.

How Benefits OS Solves It

COBRA in Benefits OS is built right into the core system — not tacked on or outsourced.

Here’s what that looks like in practice:

Eligibility is tracked in real-time, based on hours and remittance — so when someone falls out of coverage, the system knows
Notices go out automatically, and we log the delivery
Premiums and grace periods are tracked, with clear visibility for both staff and members
Member self-service means people can elect coverage, make payments, and view their COBRA timeline online
Your staff stays in control — not waiting on an outside vendor to respond to a ticket