The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows your client’s employees to continue their group insurance coverage after a qualifying event by self-paying their insurance premiums. Our full-service COBRA administration services allow your client to delegate their COBRA population to ASi, leaving them to focus on their active employees and their benefits.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) was passed in 1985 to help reduce the rate of uninsured Americans. This Act forces employers to offer insurance continuation to anyone who would otherwise lose coverage due to a qualifying event.
What is a Qualifying Event?
COBRA qualifying events are specific events that trigger an individual to lose their group benefit coverage. Qualifying events determine who would be the eligible beneficiaries and the amount of time COBRA coverage can last.
Qualifying Events for Employees include:
- Voluntary or involuntary termination of employment
- Reduction in hours of employment
Qualifying Events for Spouses and Dependent Children include:
- Voluntary or involuntary termination of the covered employee’s employment
- Reduction in hours worked by the covered employee
- Divorce or legal separation from the covered employee
- Death of the covered employee
- Loss of dependent child status under the plan rules (Dependent Children Only)
- Covered employees becoming entitled to Medicare (This is a rare occurrence)
Under COBRA, employers must provide written notification to all covered employees and their dependents of their rights under COBRA. The notification of rights must be provided in three occasions:
- Upon inception of benefit coverage
- In the summary plan description
- Upon the occurrence of a qualifying event
If you do not comply or violate COBRA laws, you could be penalized. COBRA is jointly enforced by the IRS, the U.S. Department of Labor and the U.S. Department of Health and Human Services. Violation penalties vary but can be significant, ranging from daily fees, civil lawsuits, attorney’s fees, and interest.
COBRA Administration and Services
We offer full-service COBRA administration which allows you to concentrate on your active employees and allow us to handle your COBRA participants. For more information, please visit here.