COBRA benefits: we commonly associate this term with unemployment. However, COBRA gives employees options to retain their benefits for a variety of reasons, not just unemployment. These “Qualifying Events,” as they’re called in COBRA’s legalese, include such life changes as marriage, childbirth, and divorce. If these qualifying events cause an interruption in benefits coverage, that’s when COBRA options kick in.
As the coronavirus pandemic causes unprecedented interruptions to the traditional workplace, many companies are dealing with furloughs, layoffs, or a reduction in hours. Depending on your company’s policies, and the benefits plans you offer, COBRA could apply to some or all of your employees.
So, let’s say you’ve checked into your health plan’s coverage requirements, and you have employees who are eligible for COBRA because they’re furloughed, not working enough hours for benefits, or have been laid-off. What’s next?
Are There Options Besides COBRA?
If you’re trying to avoid saddling your employees with full-cost benefits premiums during a furlough, reduction in hours, or a temporary lay-off, you might find some options.
For example, with a reduction in hours, your company may be able to negotiate with the insurance provider to waive the hours requirement due to a COVID-19 work stoppage.
If your employees are being laid off temporarily or furloughed, your company could potentially bring them back to full work status before the next month’s premiums are due, reinstating them before their benefits lapse.
Some employers are also electing to pay premiums for their employees during a temporary unemployment period.
For any of these options, it’s important to carefully look at your benefits plans and understand their structures and qualifying events, then have a conversation with your providers to see what arrangements can be made. Because of the extreme circumstances surrounding COVID-19 job loss, there are also state and federal programs which might assist your company in continuing to offer health benefits to temporarily unemployed staff.
Administering COBRA Benefits for Your Workforce
If you ultimately have to lay-off employees and they become eligible for COBRA, your company is still responsible for administering those benefits.
Some of your administration tasks will include notifications to the benefits provider of qualifying events, and to all participants in the healthcare plan — including participating spouses. You’ll have to inform the insurance plan that the employee is not covered and COBRA has been offered, and then inform them again should the employee elect COBRA. You’ll be responsible for managing payments, properly documenting late premiums, adhering to guidelines on incomplete payments, send notifications of any additional qualifying events which could extend COBRA coverage, and potentially terminate coverage if the employee becomes covered elsewhere.
Sound like a lot?
COBRA administration has many moving parts. And whether COBRA is part of your COVID-19 response or not, as a benefits administrator, it should be integrated into your daily processes. That’s why we’ve fully integrated COBRA into our benefits administration platform. From ACA to member payments, we’ve got COBRA under control. If you need help navigating COBRA and other complications caused by COVID-19, we can help!