With all the upheaval regarding Health Care Reform, COBRA is still an important option for millions of workers and their families. Contrary to what many predicted, not only did the new health care reform law refrain from eliminating COBRA, it did not change any of the rules. In fact, Congress is still working on COBRA provisions which would expand its realm and make it an even more integral part of the health care reform equation.

The following are some interesting COBRA statistics from the recent Commonwealth Fund Brief survey:

• An estimated 15 million working age adults lost their jobs and health benefits from 2008 through 2010.
• 25% of adults were able to go on their spouse’s insurance policy or find other coverage; however, 14% continued their coverage through COBRA.
• Nearly three quarters (72 %) of respondents who became uninsured skipped a recommended medical treatment or follow-up test; did not get a specialist or other physician care when needed or fill a prescription.
• By comparison, 42 percent who remained insured even after losing their job and health benefits experienced just one of the above problems.
• Nearly three quarters (72 percent) of workers who became uninsured when they lost their job reported at least one problem with medical bills or accrued medical debt compared with 49 percent of adults who remained insured after losing their job and health benefits.
• In 2010, 58 percent of workers, or about 67 million people, would likely have been eligible for COBRA if they had lost their job and health care.
• Unemployed workers with COBRA coverage averaged annual premium costs of $5,049 for an individual plan and $13,770 for a family plan based on employer plan costs in 2010.

On April 15, 2010, the President signed H.R. 4851 which extends the subsidy eligibility date from the current March 31, 2010 (per the Temporary Extension Act of 2010) to May 31, 2010. Employees who are “involuntarily” terminated between September 1, 2008 and May 31, 2010 may be eligible for reduced rates (that are 65% subsidized by the Federal government). 

Changes made by the H.R. 4851 are as follows:

• The Act changes the end date to whom should be offered COBRA premium subsides from 03/31/2010 to 05/31/2010.
• The Act extends notifying terminated employees who previously experience a Reduction in Hours Hours after September 1, 2008 and is then involuntarily terminated between March 2, 2010 and March 31, 2010 to May 31, 2010.

COBRA Solutions has made the necessary changes to the COBRA Administration Manager software and the new version is available for download by our current COBRA Solutions customers.

Jordan was granted a medical Leave of Absence on June 6, 2002. The Family and Medical Leave Act (FMLA) under the IBP plan states that: Employees can continue coverage for up to 12 consecutive months while on an approved medical leave, and for one month for personal leave of absence. Contributions must continue to be made to the Plan in order to retain coverage during the leave of absence. If the employee does not return to work at the end of the approved leave period, then coverage will be terminated, unless continued in accordance with the COBRA continuation provisions.

Killis' argument was that the plan administrator sent the election notice to the wrong address even though Killis provided an address change before his termination. The court rejected that argument based on Killis deposition where he stated that Medieval Knights did send the notice to his last known address and that he was receiving mail at this same address, including his paycheck at the time of the notice.

To update your system, select the “Update Software Via Internet” option found under the File Menu. The system is going to want to update the Plan documents as well as the Explanation of Benefits. If you have modified/edited these documents and do not want the system to copy over them, do not update them.

2008 Cafeteria Plan Manager Changes – In 2008, the Cafeteria Plan Manager has been upgraded in numerous ways. First (and most noticeably), the Things-to-do list is now part of the Navigator and has been redesigned for speed. Second, we have implemented the ability to enter Third Party Administrator (TPA) information and two methods for collecting TPA fees. Third, for employer groups in Massachusetts, you will now have the ability to use the state-created documents for the Massachusetts Health Care Reform Law. Forth, we have replaced the notes section of member and company forms so the user may enter as many notes as they like and even categorize them. Lastly, we took recommendations from our users and incorporated them into this new edition.

As we enter a new year, we receive numerous phone calls regarding COBRA administration procedures. And with the addition of many new users, our staff felt it important to go through the basics of COBRA administration so everyone has a clear understanding as to "what needs to be done when" and your administration responsibilities. We know that this may be elementary for many of our seasoned professionals but we still recommend that you take the time to read through it.

• What is COBRA?
• What is a qualifying event?
• What are the required notifications?
• What about COBRA Premiums?
• What is a disability extension?
• What is a Multiple Qualifying Event?

1) the form of the election;

2) the timing of the election; and 

3) the separate election rights of qualified beneficiaries. 

Though there is no requirement that a qualified beneficiary's election form be in writing, it is highly recommended that you do so. The DOL regulations state that certain information is required for the COBRA election and for good business practice a written notice should be sent. COBRA Administration Manager has the election form as part of the qualifying event notice. The timing of COBRA elections according to the IRS regulations are made on the date they are sent to the Plan Administrator. If the election is hand delivered, then the date of delivery should be the date on which the election is made. Both the employee and covered dependents should be granted independent election rights to COBRA coverage. For example; a married employee with 3 children and family medical coverage terminates employment. The former employee could decline coverage for himself while the spouse and children decide to accept the continuing coverage.