Cobra Administration

Written by Serena Berger
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COBRA (which stands for the Consolidated Omnibus Budget Reconciliation Act) has been in effect since 1986. It requires employers to continue coverage of benefits to employees and their families under a variety of circumstances which were not previously covered. Most often, this entails a continuation of health care at a group rate for someone who has left your business. Typically the employer does not have to pay the premium that that they were paying before, but the group rate for insurance will be cheaper than it would be for individual coverage.

Failure to offer COBRA coverage can result in severe federal penalties. Many small-to-medium sized businesses, however, do not have the resources to devote to COBRA administration. It is one of the most complex aspects of HR benefits administration, and there are a seemingly infinite number of permutations of situations in which COBRA coverage is required and combinations of features which may be included when it is offered.

Outsourcing COBRA Administration

It is no surprise that COBRA administration is often outsourced--even when a company has its own benefits department or HR department which tracks some benefits and compensation. A third party may be entirely devoted to everything from notifying employees of eligibility to billing qualified beneficiaries. They may even collect payments for carriers and archive records which you will need.

If you don't want to go so far as to outsource all aspects of COBRA administration, you may find that the best option for you is finding supported software specially designed for that single aspect of benefits administration. The software can be integrated with your HR department's database and/or your financial office's, but it will also have specialized functionality for COBRA benefits. Good software will connect with a manufacturer's network and automatically upload information about policy changes to make sure that you remain in compliance and provide coverage as efficiently as possible.

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