HR Management & Compliance

Health Benefits Reminder: New COBRA Rules Take Effect; What You Need To Know

Last March we reported on changes coming to the COBRA rules. Here is a quick rundown on the highlights of the updated regulations that take effect January 1.


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Key Provisions

     

  • Core coverage. COBRA beneficiaries no longer have to be given the option of choosing only core medical coverage from a single plan that provides other benefits, such as dental or vision coverage. Instead, they can be required to accept or reject the entire benefits package. Kathleen Meagher, an employee benefits attorney with Landels, Ripley & Diamond in San Francisco, says you should revise election forms accordingly.

     

  • Electing coverage. For purposes of determining whether a COBRA election is timely, it is considered to be made on the date it is sent to you or the plan administrator. There are also revised rules for Health Flexible Spending Accounts.

     

  • Open enrollment. If active employees can select from several plans during an open-enrollment period, COBRA participants must be offered the same options.

     

  • Premium payments. If a COBRA premium payment is short by an amount “not significantly less” than the total due, you must write it off or give the person at least 30 days to pay the shortfall. Also, anyone, including a hospital, can make COBRA premium payments on behalf of a beneficiary.

     

  • Clarification of small-employer exemption. Independent contractors, sole proprietors, partners and corporate directors aren’t counted in determining whether you have fewer than 20 workers, making you exempt from COBRA – even if your health plan covers them.

     

  • Other coverage. You can’t deny the right to elect COBRA coverage because someone is also covered under another health plan or under Medicare. Be sure to review your COBRA notice and election forms for compliance.

     

  • Disability extension. Anyone eligible to elect COBRA because of a qualifying event may select the 29-month disability extension coverage period if an eligible family member is disabled, even if the disabled person doesn’t elect COBRA. There are specific limits on the premiums that can be charged in this situation.

     

  • Provider inquiries. You must respond to health care provider inquiries regarding the status of an individual’s COBRA coverage.

 

For More Information

Contact the Pension and Welfare Benefits Administration at (415) 975-4600 in Northern California and (626) 583-7862 in Southern California.

 

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