Navigating COBRA’s many rules and regulations may feel like a daunting task. We're here to make your COBRA administration easy by simplifying the key points you need to know.
COBRA allows individuals to continue their health care coverage after losing eligibility because of events like job loss or reduction in work hours. This federal law ensures that employees and their families can maintain their health insurance for a limited time under certain conditions, providing a safety net during transitional periods.
Understanding COBRA involves addressing several crucial questions:
Key qualifying events for COBRA include end of employment, reduced work hours, death, divorce, and children aging off a plan. It’s important to note these events must result in the loss of health coverage to create a COBRA-eligible scenario.
Depending on their administration structure, employers have either 14 days or 44 days from the loss of coverage to provide employees with a notice of their COBRA rights. This notice should include information on how to elect COBRA coverage, cost and timelines for enrollment.
Depending on the scenario, COBRA coverage can last either 18 or 36 months following a qualifying event. And in some circumstances, such as in the case of a disability, it may be extended to 29 months.
Coverage may also end early for reasons like obtaining new health insurance or failing to pay premiums on time. It is crucial for employers to provide accurate and timely notices to avoid legal issues and ensure seamless COBRA administration.
Employers have specific obligations under COBRA, including notifying a third-party administrator (TPA) within 30 days of a qualifying event to ensure compliance. Additionally, qualified beneficiaries have the right to elect COBRA coverage independently, allowing each person affected by the qualifying event to make their own decision regarding continuation of coverage.
The Great Resignation has significantly impacted employee benefits, leading to a surge in COBRA applications. As more employees leave their jobs, either voluntarily or due to layoffs, the demand for continued health care coverage through COBRA has increased. Many employers now face the challenge of managing this influx while maintaining compliance and providing seamless transitions for their departing employees.
To help employers manage COBRA efficiently, here is a comprehensive 10-step process:
To successfully navigate COBRA administration, employers must prioritize timely notifications and accurate documentation. Given the rise in COBRA applications fueled by the Great Resignation, it's more important than ever for employers to be on top of these duties. Following our 10-step process flow can help employers ensure compliance, mitigate risks and provide essential health care coverage to former employees.
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