We know it’s difficult to maneuver all the guidelines and regulations associated with COBRA. So we’ve decided to put together a list of Do’s and Don’ts.
But first – and for the sake of clarity – let’s cover the basics:
What Is COBRA, And Who Is It For?
COBRA offers health coverage to individuals and families in need. COBRA itself – or the “Consolidated Omnibus Budget Reconciliation Act of 1985” – was originally passed in the wake of the economic recession of the early 1980s. Workers’ lives were suddenly tossed into upheaval. They lost their jobs – and with their jobs, their employer-sponsored health coverage.
If workers (or their loved ones) qualify for COBRA, they’re entitled to continued health benefits. Certain qualifying events – like job loss (voluntary or involuntary), significant scheduling changes (moving from full-time to part-time), workplace transitions, and family events like death or divorce – make COBRA benefits accessible to individuals and families.
So What, Exactly, Are You Supposed To Do?
As an employer you’re responsible for making employees aware of COBRA and all of its limitations. If you’re noncompliant with COBRA – even unintentionally – you’re in danger of facing legal and financial penalties.
You’re required to provide written notification to your employees (and their families) of COBRA’s guidelines and limitations. It’s called a “notification of rights”, and it has to be given:
- At the start date of the health coverage term
- In the health benefit plan summary
- Whenever a COBRA-qualifying event occurs
A Little More About the “COBRA Notification of Rights”
Let’s explain the Notification of Rights a little more clearly.
COBRA states that you must notify your employees and their dependents of COBRA’s provisions within 90 days of the beginning of plan coverage. Should an employee that’s already enrolled in a health plan add a dependent – that dependent must also be informed within 90 days of the beginning of plan coverage. The “Notification of Rights” has to be mailed directly.
Document, Document, Document
In addition to providing a notification of rights, you’ve got to maintain written documentation illustrating your company’s compliance with all of COBRA’s laws and guidelines.
So What Shouldn’t You Do?
Employers have made some pretty significant mistakes in handling their own COBRA administration. Here are some of the most common mistakes and misappropriations:
What They Failed To Do
- Give a notification of rights to their employees
- Offer an “election notice” to qualified or prospective dependents
- Offer open enrollment
- Recognize an event that qualified an employee for COBRA benefits
- Document properly or consistently
- Collect a premium
- Understand the requirements of Medicare
What They Shouldn’t Have Done
- Provided employees with coverage that wasn’t required
- Provided plan coverage for longer than was necessary
- Incorrectly managed plan timeframes for COBRA coverage
- Misworded Rights-notices poorly, so as not to meet Department of Labor standards
- Over-paid invoices
There’s Just No Way Around It – COBRA Administration is a Complex Business
COBRA management is a difficult – and often confusing – endeavor. You don’t have to exhaust yourself with checking and re-checking guidelines, measuring compliance against COBRA regulations, or any of the other red-tape protocols associated with COBRA administration.
Talk to COBRAGuard. We’ll handle it for you. Call us at 610.777.4123 or email Mike Fields today.