Complexities of COBRA

COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that provides certain employees and their families the right to continue group health benefits after a qualifying event, such as a job loss, reduction in work hours, or other qualifying events. While COBRA is designed to provide important protections to workers and their families, there are several complexities associated with administering COBRA benefits. Here are a few examples:

1. Notification requirements: Employers are required to provide notice to employees who are eligible for COBRA coverage. This notice must include information about the employee's rights to continue coverage, the cost of coverage, and the deadlines for electing coverage. The notification requirements can be complex and failure to comply can result in penalties.

2. Coverage and eligibility: COBRA coverage is available for a limited time and is typically more expensive than the coverage available to active employees. Additionally, there are eligibility requirements that must be met in order to qualify for COBRA coverage, such as having been enrolled in the employer's group health plan prior to the qualifying event.

3. Coordination with other benefits: COBRA coverage may need to be coordinated with other benefits, such as Medicare or other group health plans. This can create additional complexity in managing the administration of COBRA benefits.

4. Premium payment and collection: COBRA coverage is typically more expensive than coverage available to active employees, and premiums must be paid by the individual who elects COBRA coverage. Employers are responsible for collecting premiums and ensuring timely payment, which can create additional administrative burdens.

5. Termination of coverage: COBRA coverage may be terminated if the individual fails to pay premiums or if the individual becomes eligible for other health coverage. This can create challenges in managing the termination of coverage and ensuring compliance with applicable regulations.

6. Changes in the law: COBRA regulations are subject to change, which can create additional complexity in managing the administration of COBRA benefits. Employers must stay up-to-date on changes to the law and ensure compliance with all applicable regulations.

OneSource Virtual’s COBRA management services automate and manage benefits continuation directly within your Workday Benefits application, reducing errors and your risk of non-compliance. No matter your company size, we handle it all for you so your employees can focus on work that is more impactful for your organization.

Employees are supported through a user-friendly portal with access to full contact center support, and their premiums are remitted to you. If you need support for unpaid workers and/or retirees, we can add these services too.