COBRA

  • The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 requires companies with 20 or more workers to offer employees and dependents, called "Qualified Beneficiaries", the opportunity to continue identical group insurance coverage that would normally be lost due to certain qualifying events.

    COBRA administration services offered by BenefitsAssist, inc.:

    • Mail all DOL General Notices for newly covered members

    • Mail Event Notices to all covered qualified beneficiaries when the plan becomes subject to COBRA

    • Send separate notices to dependents known to reside at a different address

    • Track monthly premium payments

    • Generate coupons for qualified beneficiaries for ease of payment

    • Keep all COBRA records for the company

      • check reconciliation

      • updating of enrollments

      • direct correspondence with qualified beneficiaries and/or dependents and the insurance carrier

    • Inform employer of COBRA status of enrollees

      • enrollment status report

      • termination report

      • benefit plan report

      • premium reconciliation

    • Act as a liaison between the COBRA participants and the insurance carriers

    • Act as a contact between COBRA participants and employer, answering COBRA questions and concerns

    • Support state continuation administration

  • The Department of Labor (DOL) general notice provides general explanations of COBRA requirements. It also lists occurrences that qualify as a COBRA event. In addition it outlines the employee's responsibility to notify Human Resources concerning events such as divorce, separation or when children can no longer be listed as dependents.

    The model general notice is found at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra.

    We mail general notices concerning rights and obligations under COBRA to:

    • all newly covered employees

    • new spouse and/or dependents of covered employees added mid-year

    • newly covered spouse and/or dependents added during open enrollment

  • The event notice provides the Participating Qualified Beneficiary (PQB) with the information regarding the opportunity to enroll under COBRA continuation. This notice includes premium information, as well as the grace periods allowed to sign up for continuation coverage.

    The model event notice can be found at https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra.

    Administrative services provided by BenefitsAssist, inc. for the event notice:

    • Mail event notice to all employees and/or dependents experiencing a COBRA event

      • termination

      • reduction in hours

      • divorce/separation

      • retirement

      • ineligible dependent

      • Medicare entitlement that causes loss of coverage

      • disability

      • end of FMLA leave

    • Enroll COBRA participants with different carriers

    • Collect COBRA premiums

    • Answer COBRA concerns

    • Reconcile premiums

    • Generate monthly reports for the employer

    • Terminate COBRA participants at the end of COBRA period or for lack of payment

  • The IRS evaluates employer records to validate COBRA compliance for companies with 20 or more employees. A joint Department of Labor (DOL) and IRS task force tracks individual complaints for COBRA violations.

    • What are the implications for employers?

      • Employers are required to demonstrate COBRA compliance during a corporate income tax audit. The IRS reviews employer’s method for notifying employees regarding qualifying events, records of the employees electing COBRA coverage and information on premiums charged for COBRA continuation.

      • Companies can be fined by IRS for non-compliance with COBRA regulations.

    • How can BenefitsAssist, inc. help employers comply?

      • Notification of group health continuation coverage is issued to newly covered employees and their dependents. BenefitsAssist, inc. tracks the printing and mailing dates for future reference.

      • When an employee has a COBRA qualifying event, such as termination, reduction in hours, or a change in marital status the employer should notify BenefitsAssist, inc., who will then send notification to the qualifying beneficiary within the timeline required by the IRS.