Business Benefits Group provides COBRA administration services to companies throughout the United States. BBG’s Benefits Consultants help businesses with twenty or more employees run their COBRA programs in an efficient, straightforward, and fully compliant manner.
If a business offers a group health plan to its employees, then the business may be required to offer COBRA benefits. This is an option for employees to continue healthcare coverage in the event that their insurance would otherwise be terminated. Administering COBRA benefits can be time-consuming, as it requires notices, analysis of whether an employee qualifies for COBRA benefits, and other various tasks for the duration of the coverage. BBG’s Benefits Consultants can take over the tedious and lengthy administration of a COBRA program, providing time and cost savings for many employers.
What is COBRA?
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives employees who lose their health benefits the option of continuing coverage for a set period of time. It is a temporary extension of health insurance, offered under certain circumstances, such as divorce, death, job loss, a reduction in hours work and transition between jobs. Employers with twenty or more employees on a group health plan are generally required to offer COBRA benefits.
The premiums are usually covered in full by the employee, and employers may add a two percent surcharge to the premiums to cover administration of the plan. COBRA provides rules for how employees and their family members may elect to continue health insurance coverage, and requires employers and health plans to provide notice of these benefits to employees.
Eligibility for COBRA Benefits
In order to be eligible for COBRA benefits, an employee must be a “qualified beneficiary.” A qualified beneficiary is anyone covered under the business’s group health plan the day before an event occurs that causes loss of coverage. This could include employees, their spouses and dependents, retirees, and partners in a partnership. Employees who are typically not qualified beneficiaries may include those who have enrolled in Medicare, or those who have declined to participate in the group health plan.
Once employers have determined that the person requesting COBRA benefits is a qualified beneficiary, then they must then look at whether or not a qualifying event has occurred to trigger COBRA coverage. This could include voluntary or involuntary termination of employment, except in the case of gross misconduct. Because misconduct is not defined by COBRA, it may be costly to deny benefits on this basis unless the misconduct was willful and connected to the employee’s job. For example, if an employee stole from the company, that may provide a basis for denying COBRA benefits.
Other Qualifying Events
Other qualifying events may include but are not always limited to: an employee’s death, active military duty, the company’s bankruptcy, an employee’s reduction in hours, a covered spouse’s divorce from an employee, an employee’s death, a dependent’s change in status, or an employee becoming eligible for Medicare. A COBRA administrator will need to review the circumstances of each case to determine whether the situation is a qualifying event. Depending on the type of qualifying event, COBRA benefits could last for anywhere from 18 to 36 months. The benefits may include group health plans, medical spending accounts, and dental, hearing, and vision plans.
Duties of COBRA Administrator
If an employer is required to offer COBRA benefits to employees, then the administrator will have certain duties. This includes notifying employees and covered spouses and dependents of the right to COBRA benefits when they first join the health plan. If a qualifying event occurs, the administrator is required to notify the covered parties of their right to continue coverage through COBRA within 14 days. This notice should include information about the healthcare marketplace as well as an explanation of the right to COBRA benefits. An employee has 60 days to elect COBRA coverage; if they fail to do so, then the employee is no longer eligible. When there is a qualifying event, then the COBRA Administrator must also inform the insurance company that a loss has occurred, within 30 or 60 days, depending on the qualifying event.
In addition to complying with federal law, COBRA plan administrators must also determine if their state has any additional laws regarding COBRA-like benefits for employees. If so, then the plan must also cover the employer’s obligations under state law. Because laws regarding COBRA coverage vary from state to state, BBG’s Benefits Consultants can work with employers to ensure that they are fully compliant with both state and federal law.
Advantages of Working With BBG’s Benefits Consultants
Making sure that a business is administering COBRA properly can be a fairly strenuous process. BBG can ease this burden for employers by administering the plan and providing support on a year-round basis.
Contact Business Benefits Group Today
Businesses who are interested in learning more about how they can outsource COBRA administration can contact Business Benefits Group by sending us a message online or by giving us a call today. BBG’s Benefits Consultants can take employers through the entire process while ensuring that both employee benefits and COBRA administration are running smoothly.