What is COBRA?
COBRA requires continuation coverage to be offered to covered employees, their spouses, former spouses, and dependent children when group health coverage would otherwise be lost due to certain specific qualifying events.
Five common COBRA mistakes are:
01. Failing to send notices timely
Group health plans must provide a general notice describing COBRA rights to each newly covered employee and their spouse, if also covered under the plan. This notice must be provided within the first 90 days of coverage.
Employers must notify their plan administrator of the event within 30 days. The plan administrator must provide an election notice within 14 days after receiving notice of a qualifying event.
COBRA election notices should be provided to all impacted beneficiaries, including the spouse and dependents.
Hand-delivered notices to an employee during an exit interview will not satisfy this requirement. A mailed notice should be sent to the spouse and dependents.
Employers should offer COBRA for all COBRA-eligible plans.
COBRA-eligible plans include health, dental and vision insurance plans but may also include Medical FSA (if underspent), Health Reimbursement Accounts (HRAs), and Employee Assistance Plans (EAPs).
Employers should not offer COBRA for 401(k), Short Term Disability, Long Term Disability, Life Insurance and Health Savings Accounts (HSAs).
Failure to enforce payment deadlines invites the argument that there are no deadlines and can create consistency issues.
Employers also often forget to notify COBRA continuants of rate changes, particularly at Open Enrollment. COBRA continuants should receive the same notice of new rates and plan changes as active employees at Open Enrollment.
02. Not enough documentation
03. Not offering to all beneficiaries
04. Not offering COBRA for all eligible plans
05. Inconsistent payment administration
Interested in Flores COBRA services?
Contact your dedicated Account Manager or a member of our Business Development team today at 800-532-3327.