What is COBRA and HIPAA Administration?

Under new HIPAA regulations, you have to provide privacy information to each new hire on the date of hire or as soon as possible. COBRA Rights information is provided to the new hire at the same time or when the employee is covered by benefits.

If your company is fully insured, your health insurance provider will handle your COBRA participants. However, if you have other benefits such as dental or vision with different providers, your health carrier will not provide COBRA notices for these benefits, and the required HIPAA Certificate of Coverage on these benefits will not be forwarded to your ex-employees.

Employee training for COBRA compliance requires a comprehensive search for rules and regulations at the Department of Labor (www.dol.gov) and the IRS (www.irs.gov). You are then required to write the letters which will be sent out to ex-employees (wording for the COBRA letter is in DOL regulations). These letters must then be approved by your legal department or an outside source to ensure that you are in compliance with the regulations.

It's recommended that all COBRA Rights letters be sent out under a Certificate of Mailing, a court-approved mailing piece, which requires an employee to personally go to the Post Office and pay an additional fee for the service.

Or, you may elect to send the employee(s) to a training class where they will spend the day learning the basic rules and requirements of COBRA and HIPAA. The employee will also learn that there are certain required letters that must be sent to the ex-employees. Wording for required event letters can be found at the EBSA web site (www.dol.gov/ebsa).

Providers have to be notified upon termination and then again upon acceptance of COBRA. Notifications must be provided before the COBRA period passes. Also, an ex-employee, on a fully insured plan, has the ability to exercise State Continuation Mandates for an additional six months.

The company must then collect premiums from COBRA participants, clear the checks and pay the provider. If a person is late in paying (over 30 days plus 10 days mailing time) you may terminate them from COBRA. If the check is not accepted, then it must be returned with an explanation.

During the COBRA period, Customer Service inquiries and questions must be provided on a timely basis.

During each open enrollment period, Human Resources must provide an open enrollment letter and forms with the new rates and give the participant a chance to add or drop dependents and coverage.

Any child reaching the age where they are no longer eligible to be covered by benefits must be given the opportunity to accept COBRA.

COBRA requires that correspondence and records are stored on each terminated employee. These records must be available for audit and any potential lawsuits.

BYCSI COBRA Administration

If your company is self-administering COBRA and HIPPA programs, keeping up with current employees as well as ex-employees has added a huge workload to your Human Resource department.

Bentley, Yates Cobra Serv., Inc. (BYCSI) offers full web-based administration and compliance to take the worry and stress out of managing COBRA and HIPAA for your company.

COBRA guidelines and benefits are federally mandated, and compliance with these guidelines and benefits is solely the responsibility of the employer.

Employers who meet the federal definition of an employer with 20 or more full-time or part-time employees are subject to COBRA. An employer is said to have employed 20 or more employees during a calendar year if, and only if, 20 or more employees were employed for at least 50% of its working days during that year.

In determining the number of its employees, an employer shall treat as employees all full-time and part-time employees and all employees within the meaning of section 201C(1). Please note that each part-time employee counts for a fraction of a full-time employee. The fraction is calculated by the number of hours actually worked by the part-time employee divided by the number of work hours normally required of a full-time employee. This calculation is for the purpose of determining COBRA eligibility only.

Please note that if an employer is determined to be COBRA eligible within the course of a calendar year, the group will become COBRA effective on January 1 of the calendar year immediately following the calendar year in which the employer attained COBRA eligibility. An employer subject to COBRA is responsible for notification to the carrier.

Bentley, Yates Cobra Serv., Inc. (BYCSI) provides COBRA compliance and administration for employers meeting COBRA eligibility guidelines. Outsourcing your COBRA administration will protect your company from potential COBRA noncompliance.

Our web-based COBRA administration provides you with:

Employer Services

COBRA Participants

Premium Billing

Participants are provided with premium coupons, during their eligibility period, showing the amount due and due date. We inspect each premium in our system for timeliness and correctness, relieving your Human Resource professionals from the time-consuming task of collecting and tracking payments.

We forward premiums to the employer at the end of each month with reports showing each benefit paid by the participant and the amount of premiums.

Any benefit changes or rate changes are monitored and the participant is notified as quickly as possible.

HIPAA

HIPAA and COBRA Portability are federally mandated regulations and are enforced by the Department of Labor and the IRS. BYCSI services include a Certificate of Coverage with the COBRA notification letter and again with the end of COBRA eligibility notification. It is also available to ex-employees up to 24 months following the loss of coverage.

State Continuation

Many states have enacted State Continuation Mandates which require employers to offer extended benefits to terminated employees. The state laws vary and force compliance on employers with 2 to 19 employees as well as employers eligible for COBRA (20+ employees). Since these laws vary from state to state, it becomes very complex for employers to administer.

We navigate through the Continuation Mandates specific to each state so your Human Resources professionals have the time to focus on other important issues. BYCSI systems allow us to monitor the regulations and add the required number of months for State Continuation. For example, the State of Texas requires an additional six months of benefits be offered to termed employees.

Employers with 2 to 19 employees need to allow six months of medical benefits only. COBRA eligible employers must allow an additional six months of medical benefits after COBRA eligibility ends.

USERRA Administration

Federally mandated laws regarding our Armed Services require compliance with the Uniformed Services Employment and Reemployment Act of 1994. The final USERRA regulations went into effect in January 2006. This can increase coverage up to 24 months for all employers including those with less than 20 employees.

Relevant links to more COBRA Information

'Employers Guide to COBRA' - downloadable in PDF format
http://www.dol.gov./ebsa/pdf/cobraemployer.pdf

FAQs About COBRA Continuation Health Coverage
http://www.dol.gov/ebsa/faqs/faq_compliance_cobra.html

Office of Civil Rights-HIPAA
http://www.hhs.gov/ocr/hipaa/

'THE “NEW” REGULATIONS
REGARDING COBRA NOTICE OBLIGATION'
Article by Keith McMurdy, Esq. - Grotta, Glassmann & Hoffman, P.C.
http://gghlaw.foxrothschild.com/cobranew.pdf

'Is your Company Required to Offer COBRA Continuation Group
Health Coverage to Employee? - The Rules have Changed!'
Article by Arrtoney Patricia F. Claire - Willingham & Coté, P.C.
http://www.willinghamcote.com/articles/pfc-cobra-ruleschanged.pdf

'Final COBRA Regulations Raise New Issues for Businesses'
Article by Arrtoney Patricia F. Claire - Willingham & Coté, P.C.
http://www.willinghamcote.com/articles/pfc-finalcobra.pdf

'New COBRA Regulations'
Article by Mindy K. Dale - Weld, Riley, Prenn & Ricci
http://www.wrpr.com/articles/new_cobra_regulations.htm

Texas Department of Insurance
http://www.tdi.state.tx.us

Other relevant Links
FSA Information
HRA Information

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