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COBRA Administration

COBRA

The Consolidated Omnibus Reconciliation Act of 1985 (COBRA) is a law giving employees the right to continue participation in group health insurance coverage after leaving their job. Employers who sponsor group medical, dental, vision, flexible spending accounts and EAP health plans must permit covered individuals who lose coverage to elect to continue their coverage for a prescribed period of time on a self-pay basis.

The COBRA law lays out specific employer notification requirements and administrative guidelines. Failure to provide proper and timely notifications, or carefully adhere to COBRA regulations can result in severe penalties and possible litigation.

It is important to note that COBRA regulations periodically change in accordance with subsequent laws passed by Congress, or by individual State mandates. The most recent Federal law affecting COBRA was the American Recovery and Reinvestment Act of 2009 (ARRA). Under this law the government required additional notifications, and subsidized COBRA premiums for eligible terminated employees. Several states are now requiring employers to extend COBRA coverage beyond what is required under federal guidelines.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a law that provides important protections for people who have pre-existing medical conditions or might suffer discrimination in health coverage based on a factor that relates to an individual's health. Under the law is a requirement to provide a "Certificate of Creditable Coverage" to employees when their health coverage is terminated. Benefit Strategies administrative system will automatically generate the HIPAA certificate when a COBRA notice is generated to a new qualified beneficiary (QB), and again when the QB terminates COBRA coverage.

How Benefit Strategies can help:

Benefit Strategies can take over the responsibility to provide proper, legal notifications to employees who newly join the employer's health plan and to those employees and/or dependents who lose their health plan eligibility. We will receive and record monthly payments from COBRA participants and notify insurance carriers to reinstate or terminate coverage as appropriate. On a monthly basis, funds received from COBRA participants will be remitted back to the employer. Accuracy and efficiency are built-in to our systems, and we continue to exceed all industry performance benchmarks for notification turnaround, response time and processing accuracy.

Our Enhanced COBRA Connection (ECC) system fully automates all administrative functions and provides diverse reporting and document tracking. Clients may access this on-line system 24/7/365 to enter the information needed to generate letters to new plan members and qualified beneficiaries, check the status and information of their COBRA participants, and generate a wide variety of reports. This state-of-the-art system is flexible enough to meet all of your administrative needs.

Rely on our expertise

If you currently administer the COBRA/HIPAA processes at your organization, you already know that processing the required documentation is complicated and labor intensive. Our staff will help you with this intensive process by taking care of all related COBRA/HIPAA paperwork and by ensuring that your plan is administered within the required compliance guidelines. Between our Certified COBRA Administrators and our software vendor, we ensure that you stay in compliance.

With Benefit Strategies as your COBRA/HIPAA Administrator, you have the option of calling our offices to inquire about activity on your account or checking a participant's status via our Enhanced COBRA Connection web site. Not only do we support you and your Human Resources staff, we will also support your employees who have questions regarding COBRA.

Brief Overview of COBRA Services:

  • Prepare Initial Notice letters to employees newly enrolled in the employer's health plans. This notice explains the employee's rights and responsibilities under the COBRA law.
  • Prepare COBRA notices for Qualified Beneficiaries who lose eligibility to their employer's health plan. Employee and family qualifying events include termination of employment, reduction of hours, retirement or activation to military service. Dependent qualifying events include death of or divorce from an employee, or a dependent child reaching an age where they lose eligibility to be enrolled as a dependent of the employee.

    • Qualified Beneficiaries who elect COBRA will be sent premium coupons and will be reinstated with the appropriate insurance carriers.
  • Insurance premiums are collected and recorded. Payments are due on the first of the month, however a 30 day grace period is allowed. Payment reminders are mailed to participants on the 20th of the month if payment has not been received. Payment may be made by check or ACH.
  • In the first week of the month, COBRA premiums collected from the previous month will be disbursed to employers.
  • COBRA participants who do not remit payments in the required time, will be notified that they have been terminated from COBRA. Benefit Strategies will terminate coverage with insurance carriers.
  • Open Enrollment - Benefit Strategies will notify COBRA participants of plan and rate changes when health plans renew. We will also notify carriers of enrollment changes.
  • On-line access allows Employers to see COBRA participant activity, letters mailed, payments made, and relevant event dates. A wide variety of administrative reports may be run in several formats, and printed.
  • On-line access is available to COBRA participants to see activity on their account including letters sent, payments recorded and relevant dates.
  • Expert, dedicated customer service team for your Human Resources department and COBRA participants.