Top 3 Mistakes Employers Make with COBRA Administration

Having to manage your company’s COBRA correctly is no easy task – but deadlines are crucial and penalties for being out of compliance can cost your business a lot of money.

Some of the top mistakes we see employers make while administering COBRA are:

 

 

1. Assuming only medical, dental, and vision plans apply to COBRA
2. Forgetting to send out notices to all COBRA eligible employees within 90 days of coverage
3. Recognizing and informing employees of qualifying events

So we decided to put together a small FAQ addressing these mistakes in hopes to prevent future business hardships regarding COBRA.

What is COBRA?
An acronym for the Consolidated Omnibus Budget Reconciliation Act, COBRA gives employees and their dependents a right to pay premiums for and continue group health insurance after certain qualifying events. Some of these events include: death of a covered employee, termination or reduction in hours of work of a covered employee (for reasons other than gross misconduct), divorce or legal separation of a covered employee and their spouse, a child’s loss of dependent status/coverage under the plan, and a covered employee’s becoming entitled to Medicare.

Should you be offering this benefit to your employees?
Employers with 20 or more employees (part or full time) are required to offer COBRA coverage and to notify their employees of such coverage.

According to the Department of Labor, group health plans must provide covered employees and their families with certain notices explaining their COBRA rights. Plans must also have rules for how COBRA continuation coverage is offered. Failure to send required notices within the time established in regulations could result in steep penalties.

What benefits are covered under COBRA?
If your business is subject to COBRA, all group health plans are covered: Medical, Dental, Vision, Health FSAs, HRAs, and some Employee Assistance Plans.

Fill out the form below to speak with one of our experts if you have questions regarding COBRA!

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