What is COBRA and HIPAA Administration?

Under HIPAA regulations, an employer must provide privacy and COBRA Rights information to each new employee on the date of hire or as soon as possible or when the employee becomes eligible for health benefits.

If a company is fully insured, the health insurance provider may provide COBRA administration; however, COBRA notifications and required HIPAA Certificate of Coverage for benefits such as dental or vision with different carriers, will not be sent by the health insurance provider.

If an employer wishes to do COBRA and HIPPA Administration internally, employee training for COBRA compliance is necessary. COBRA has a comprehensive set of rules and regulations established by the Department of Labor, DOL, (www.dol.gov) and the Internal Revenue Service, IRS, (www.irs.gov), which must be followed.

Letters with specific wording set forth by the DOL and IRS must be generated and approved by a legal department or an outside professional, such as Bentley Yates, to ensure compliance with all regulations. It is these letters that are sent to employees and former employees informing them of their Initial Rights and COBRA Rights; wording for the required event letters can be found at the EBSA website (www.dol.gov/ebsa). It is recommended that all COBRA Right's letters be sent out under a Certificate of Mailing, a court-approved mailing piece, which requires the employer to go to the post office for mailing; this is the only form of mailing accepted as proof of mailing the notices.

Insurance providers must be notified of employee termination and acceptance of COBRA. Notifications must be provided before the COBRA enrollment period passes; the employer has 44 days to send the notice to the former employee, who then has 60 days from the date of the letter to elect COBRA. If an employer outsources COBRA, the COBRA Administrator must be notified within 30 days of termination and the administrator has 14 days to mail the letter. Former employees on a fully insured plan also have the ability to exercise State Continuation Mandates consistent with the State in which they reside.

The company must then collect premiums from COBRA participants and pay the provider. If a participant is late in paying (over 30 days, plus 10 days mailing time) the employer 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 answered 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.

Bentley, Yates COBRA Administration

Bentley, Yates Cobra Serv., Inc. (BYCSI) offers full web-based administration and compliance to take the worry and stress out of complying with all COBRA and HIPAA mandates.

COBRA guidelines and benefits are federally mandated, and compliance with these guidelines and benefits is solely the responsibility of the employer; and failure to comply can come with heavy fines and penalties.

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 employees, an employer shall treat as employees all full-time, part-time 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 their insurance carrier(s).

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

COBRA 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.

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.

The final release of HIPAA regulations, which became effective on February 28, 2005, and applicable for plan years beginning on or after July 1, 2005, required this notice to be provided to COBRA eligible participants.

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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