What You Need to Know When Offering COBRA Continuation Coverage
June 6, 2018
As an employer, you’re required (if you have 20 or more employees) to offer COBRA continuation coverage to your employees when they experience a qualifying event. And, since COBRA is a federal law, the U.S. Department of Labor has deadlines every step of the way to guide you, your qualified beneficiaries and your plan administrator. We’ve broken down the steps that take you from your employee’s qualifying event through enrollment.
1. You notify your COBRA administrator of new qualified beneficiaries
When one of your employees experiences a qualifying event, you have 30 days to notify your COBRA administrator of the change in that employee’s status. A qualified beneficiary is an individual covered by your group health plan the day prior to their qualifying event. That means a qualified beneficiary can be:
- An employee.
- An employee’s spouse.
- An employee’s dependents.
- A domestic partner (in some states).
2. Your COBRA administrator mails Specific Rights Notices to qualified beneficiaries
Within 14 days of receiving notice of the qualifying event, your plan administrator must mail a Specific Rights Notice (SRN) to the individual who is now eligible for COBRA. With a 14-day turnaround, it’s important to have a plan administrator who uses innovative integrations to improve efficiency and reduce the risk for human error.
3. Qualified beneficiary chooses whether or not to elect for COBRA continuation coverage
Your qualified beneficiary has 60 days from the date the SRN was postmarked to elect COBRA continuation coverage. Some will choose coverage, while others may instead opt for a plan through a marketplace, such as Discovery Marketplace. If a qualified beneficiary elects COBRA, they’ll submit any forms to your plan administrator.
4. Notify members of upcoming open enrollments
The first three steps complete COBRA continuation coverage enrollment for new qualified beneficiaries. But communication is ongoing since a qualified beneficiary could be on coverage for up to 18 months (depending on the qualifying event that’s occurred). That means an individual could go through multiple open enrollments while on COBRA.
Your plan administrator needs to communicate changes to all qualified beneficiaries during open enrollment. Depending on the type of enrollment, a qualified beneficiary may or may not be required to re-elect continuation coverage.
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