COBRA Q&A

What is COBRA?
The Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA, requires group health plans with 20 or more employees to offer former employees and their dependents continued health coverage for 18 to 36 months after leaving the group.

Who is eligible to receive continued coverage under COBRA?
All employees and dependents who would otherwise lose coverage due to a qualifying event. "Qualifying events" include termination of employment, reduction in work hours, death of the employee, divorce, or a child no longer eligible for standard coverage.

Who pays for coverage under COBRA?
Under COBRA, former employees must pay the entire premium charged to their employer. Employers are not responsible for any of their former employees’ health care costs; however, employers must ensure that all administrative procedures are followed.

About MedBen COBRA Administration

COBRA administration encompasses a number of government-mandated duties, from the initial notification of continued coverage to qualified employees, to generating the expiration notice near the end of the extended benefits period. These responsibilities are subject to frequent changes, and failure to comply with COBRA rules can cost a company thousands of dollars in penalties – and leave it open to lawsuits from former employees.

MedBen is equipped to help your company avoid the potential pitfalls of COBRA noncompliance. We take care of all the details of COBRA administration, leaving you free to concentrate on the issues more important to your business. And we can do it at a fraction of what it would cost you to perform these services in-house.

MedBen COBRA administration will assist your group for a set monthly employee fee, plus a one-time set-up charge. Groups who receive HIPAA administration through MedBen receive COBRA administration at no additional charge. A two-week set-up period is required to implement the program from the time the executed contract is received.

MedBen performs a variety of services for employers, including:

• Notifying former employee or dependent of right to continue coverage under COBRA.
• Supplying all necessary forms to qualified individuals.
• Billing and collection of premium payments, and distributing payments to the appropriate party.
• Maintaining proper documentation of COBRA activity.
• Monitoring COBRA’s requirements for changes, and updating notices and procedures to protect clients from noncompliance penalties.
• Production of various management reports for the employer.
• Notifying enrollees and beneficiaries of expiration of benefits prior to end of coverage period.

MedBen COBRA administration is available at no additional cost to standard MedBen HIPAA service customers. To learn more about MedBen HIPAA, click here.

For more information about COBRA administration, e-mail our marketing department at marketing@medben.com.