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Employer COBRA Compliance Requirements

What Is COBRA?

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) provides continuation coverage requirements applicable to group health plans and the individuals that lose coverage under such plans.

Under COBRA rules, both group health plans and the individuals losing coverage under those plans have specific guidelines and strict timetables to follow in both offering and electing to receive COBRA coverage.

Administration of the COBRA rules is a four-step process that includes:

What Are The Key Components Of COBRA Plan Administration?

COBRA (Consolidated Omnibus Budget Reconciliation Act) plan administration involves several key components to ensure compliance with the law and provide continuation coverage to eligible individuals. Here are the key components: By effectively managing these key components, employers can fulfill their obligations under COBRA and ensure that eligible individuals receive the continuation coverage to which they are entitled.

What Are The Most Common Errors Of COBRA Plan Administration?

To mitigate these errors, employers and plan administrators should invest in robust COBRA administration training, maintain meticulous records, and regularly audit their COBRA processes to ensure compliance with applicable laws and regulations.

Specific Issues With COBRA Administration

COBRA administration involves a number of notice requirements and timelines, as well as a myriad of other COBRA rules. While anyone reading the COBRA rules can see that you have to identify QBs, send notices on a timely basis, etc., here are a couple of the specific issues that COBRA administrators must be aware of how to:

Excerpts From Our COBRA Training & Certification Program

The following are three of many recommendations from our COBRA Training & Certification Program that help address some of the concerns mentioned above:

Excerpt #1: Suggested Procedure For Handling Coverage During The Election & Payment Period:

  • Pend a QB's coverage as of the loss of coverage date
  • During the election and payment period, inform benefit providers who make inquiries that the QB is in a COBRA election and payment period and that coverage will be provided only if and when a proper election is made and payment received
  • If a QB does not elect and pay for COBRA on a timely basis, all pended claims should be denied
  • If a COBRA election is made and payment received, coverage should be retroactively reactivated for the period for which payment is timely received. Claims for this period then should be paid
  • Review and coordinate these procedures with any insurer or stop loss carrier and all in house or third party administrative personnel

Absent such a review and coordination, an insurer might expect and attempt to require the employer to keep coverage in effect - and pay for that coverage - during the election and payment period, regardless of the action ultimately taken by the QB.

Excerpt #2: Administrative Recommendation:

Employers seeking to reduce COBRA liability and better control claims cost should include an affirmative rejection/waiver option on their QE Notices.

Excerpt #3: Termination Of COBRA For Failure To Pay Premiums:

Perhaps the most common reason for the termination of a Qualified Beneficiary's COBRA coverage prior to its natural expiration date is the failure by the QB (or any other person) to pay the premiums due for that coverage.

Put simply, a QB is not eligible for COBRA coverage for any period for which the applicable COBRA premium has not been paid.

Although employers' COBRA administrative systems should be set-up to terminate COBRA coverage automatically upon a failure to pay premiums on a timely basis, there are several special rules in this area that must be taken into account.

Recommended Training Courses

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About The Certified TPA Designation

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More Details: https://hrcertification.com/certified-tpa-designation