COBRA
Joseph Biden was sworn in as the 46th President of the United States less than one week ago, and he has already introduced his ideas for a third economic stimulus package.
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires employers with 20 or more employees to offer continuation coverage under a group health plan for periods of 18, 29 or 36 months depending on the qualifying event.
Many employee benefit laws only apply to employers who have a certain number of employees. The challenging part is that each law has its own definition and rules on how to count the number of employees when determining if a law applies to an employer. Here are some key examples:
The U.S. Department of Labor (DOL) has issued guidance that will impact COBRA procedures, special enrollment periods, and claims procedures. The guidance will extend the length of certain time periods applicable to group health plans, disability plans and other welfare plans regulated by the ERISA law. Plan participants and beneficiaries will have additional time to do the following:
COBRA has been an administrative challenge for employers dating back to 1986 when it first became effective. On the surface, it’s easy to comprehend COBRA and its purpose, but behind the scenes, an employer has a lot of obligations it must account for to ensure compliance with the law. Take this scenario for example:
Is it or isn’t it a qualifying event?
Medicare entitlement of the employee is listed as a COBRA qualifying event; however, it is rarely a qualifying event. In situations where it is a qualifying event, it is only a qualifying event for the spouse or children that are covered under the group health plan.
That flu shot you're providing to employees. Are you offering it as a benefit to COBRA beneficiaries? Because you should be.
While COBRA is conceptually easy to understand, it is tactically more challenging to administer. Many employers are unaware that certain benefits are subject to COBRA. On the other hand, some employers are offering COBRA in situations which they don't have to because of a misunderstanding of the law.
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