COBRA requires employers with over 20 employees to offer the option of continued benefit coverage should an employee lose coverage for such things as termination of employment, reduction in hours, divorce, turning age 26, etc. In addition, most states require the continuation of coverage for group plans with less than 20 employees. Qualified individuals may be required to pay the premium for coverage of up to 102% of the plan’s cost. COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
Employers must ensure that a COBRA general notice is provided to all eligible group healthcare participants within 90 days of becoming eligible to participate in the group health plan. Hand delivery of notices to employees with participating spouses is not recommended as it does not satisfy the requirement to notify the spouse directly. In addition, COBRA outlines how employees and family members may elect continuation coverage. The employer must notify the plan administrator within 30 days of a qualifying event. At this time, the administrator must provide an election notice to the employee, the dependents, or both within 14 days of receiving the qualifying event notice.
COBRA & B3PA
B3PA provides highly skilled COBRA analysts that provide implementation and ongoing administration based on proven standards and best practices developed over 20 years of business. B3PA, powered by partner COBRA Management Services, has been administering COBRA since 1997. Fastest implementation in the industry; we can fully implement a group in one week.
With Cobra Insurance, you have the right to get COBRA benefits. This means you can get the same coverage as if you were still employed. If your employer has more than 20 employees, they must offer COBRA benefits for at least 18 months after your termination date. If your employer gives Cobra coverage, B3PA provides them with a simple way to process claims and handle COBRA responsibilities, maximizing their time spent on what they do best – running their business. For the past few years, cobra benefits administration has helped many people with their health care.
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DOL and IRS Announce Disaster Relief Related to Employee Benefit Plans Q&A.
The DOL and the IRS jointly have provided in a final rule that all group health plans, disability and other employee welfare benefit plans MUST disregard the period from March 1, 2020, until 60 days after the end of the declared National Emergency related to the COVID-19 outbreak or such other date as provided by the agencies in future guidance (referred to in the final rule as the “Outbreak Period”) for purposes of the following periods and dates:
The 30-day period (or 60-day period, if applicable) to request special enrollment; the 60-day election period for COBRA continuation coverage.
- The date for making COBRA premium payments
- The date for individuals to notify the plan of a qualifying event or determination of disability
- The date individuals may file a benefits claim under the plan’s procedures.
- The date within which claimants may file an appeal of an adverse benefit determination under the plan’s claim procedures
- The date within which claimants may file a request for an external review after receipt of an adverse benefit determination
- The date within which a claimant may file information to perfect a request for external review
- The date for providing a COBRA election notice
This means that during the outbreak period, all these dates and time limits are extended for payments due or events occurring during the Outbreak period. For example, an individual who experiences a qualifying event in April will have until 60 days after the Outbreak Period to elect COBRA. Similarly, any COBRA premiums due during the outbreak period will not be considered delinquent if the COBRA premiums are paid within 30 days following the end of the outbreak period. This means that COBRA premium payments that are due for March, April and May, at the very least at this point, are only required to be paid 30 days after the end of the Outbreak Period. This will be especially difficult in the administration of COBRA continuation coverage.
In addition, if an employee benefit plan fails to follow procedural requirements for plan loans or distributions, the Department will not treat it as a failure if (i) the failure is solely attributable to the COVID-19 outbreak, (ii) the plan administrator makes a good faith, diligent effort under the circumstances to comply with those requirements and (iii) the plan administrator makes a reasonable attempt to correct any procedural deficiencies as soon as administratively practical.
In a separate notice (EBSA Disaster Relief Notice 2020-01), the Department of Labor and the Department of Treasury, in consultation with HHS, provided relief for various deadlines and requirements under ERISA and the Code. In accordance with this guidance, an employee benefit plan and the responsible plan fiduciary will not violate ERISA for failure to timely furnish a notice, disclosure or document that must be otherwise furnished during the outbreak period if the plan and responsible fiduciary act in good faith and furnish the notice, disclosure or document as soon as administratively practical under the circumstances. Good faith acts include electronic alternative means of communicating with plan participants and beneficiaries who the plan fiduciary reasonably believes to have effective access to electronic communication, including email, text messages and continuous access to websites.
Also, the Department announced that it would not take enforcement action concerning a temporary delay in forwarding plan loan repayments or participant contributions to the plan so long as the employer and service providers act reasonably prudently and in the interest of employees to comply as soon as administratively practical under the circumstances. Finally, other relief provisions are provided concerning CARES Act loans and distributions, blackout notices and ERISA fiduciary compliance.
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