Don't Let COBRA Requirements Take a Bite out of Your Company
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Don't Let COBRA Requirements Take a Bite out of Your Company

What is COBRA?

What do employers need to do?

What do employees need to know?

What is COBRA?

The name, The Consolidated Omnibus Budget Reconciliation Act (COBRA), sounds complicated but the requirement is simple: Employers must offer temporary, continuing insurance coverage of the company’s group health care plan to an employee whose coverage ends when leaving the job.

What do employers need to do?

  • To manage a compliant COBRA insurance plan, an employer needs to have a system in place that includes scheduling, sending the proper notifications on time, billing, invoicing, processing and tracking.
  • You must remain up to date on requirements and changes in the COBRA laws.
  • Once notified by an employee about a qualifying event, you must provide the employee with clear and complete information about their on-going access to an employee health insurance plan, including the duration of coverage, costs, limitations, and the procedures for application and payment.
  • You must maintain accurate and up to date records of employees who have received continuing insurance coverage, as well as those who have been notified and have declined.

What do employees need to know?

With the help of a COBRA plan, former employees, retirees, spouses, former spouses and dependent children can continue their health coverage for 18 to 36 months.

Several types of events can trigger a COBRA health insurance conversion, including job loss, reduced hours below the insurance benefit threshold, an employee’s death, divorce or legal separation, the beginning of an entitlement to Medicare and the loss of dependent status through age or other events.

According to COBRA laws, each covered employee or qualified beneficiary is responsible for notifying the plan administrator of a qualifying event such as a divorce, legal separation or loss of dependent status with 60 days of the event or the loss of benefits. Then employers are required to notify employees or former employees in writing of their COBRA insurance rights to temporary health insurance coverage under the federal COBRA laws.