COBRA Administration
Typically, the word COBRA, can make your blood boil if you are in the HR world. Providing heath insurance coverage continuation to individuals who are no longer with the company might seem simple. However, once you dig deeper, COBRA administration and compliance is complex due to employee benefits getting more challenging year to year. The law applies to all employers that have 20 or more workers and group health insurance plans (including self-insured plans).
COBRA Requirements:
-Know which “qualifying events” trigger the employee right to COBRA continuation coverage and which individuals may be entitled to that coverage
-Send a qualifying event notification to the home address of each qualified beneficiary if a COBRA qualifying event occurs.
-Send each employee (and dependent spouse) an initial COBRA notification to the employee’s home address when first enrolled in the company’s group health plan.
-Be familiar with the administration of current COBRA Medicare and disability extension rules.
-Grant mandated extensions of COBRA coverage to the appropriate beneficiaries within the legal time limits.
-Be aware of which circumstances allow termination of COBRA coverage.
-Notify qualified beneficiaries of conversion options during the required time frame.
Here are some quick tips to help you keep everything running smoothly:
-If your company has fewer than 20 employees, check for which state continuation / mini-COBRA laws may apply.
-Your company may require individuals who elect continuation coverage to pay the full cost of the coverage, plus a 2 percent administrative charge.
-Establish a written agreement that places responsibility for billing errors with a third party administrator or carrier; otherwise, your company may be held fully responsible for the outcome of such errors.
-Each time a qualifying event occurs, ensure proper notification is sent to beneficiaries regarding their COBRA rights.
-Maintain complete documentation of COBRA- related activities and transactions, even when utilizing the services of a third party.
Feel free to contact us at DP in case you have any questions or need assistance. We’d be happy to help walk you through the complications that COBRA related administration can cause!