The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a law that was passed in 1985 to provide individuals and their families with health benefits for a limited period of time if they are no longer employed. Under this act, certain workers are able to continue their health coverage for up to 18 months after events like losing their job, reduced work hours or a transition between jobs. As an employer, it’s important that you continue providing certain employees with health coverage to stay on the right side of the law.
The only issue is that administering COBRA can be confusing and overwhelming if you’re familiar with the process and the details. If you are penalized for noncompliance and fail to tell an employee about their rights, it can lead to hefty financial penalties and legal fees. Here’s how RMI can help you with COBRA administration.
Understanding Coverage Options
For starters, we will go over all the different types of coverage so you can choose the best plan of action. Under COBRA continuation of benefits on the Federal level, medical, vision and dental benefits are included. So if an employee had existing health and vision coverage, you would be responsible for continuing coverage on either or both of these plans. Keep in mind that different states have their own COBRA requirements and have different protections than the federal law. Regardless of your situation, we’ll go over coverage options to find something that fits the need of your former employee while ensuring that your business remains compliant.
Determining Who is Qualified
According to Federal law, if you had 20 or more employees in the past year and offered them health insurance coverage, then you are usually required to continue health benefits. Also, if an employee has an eligible dependent that had health coverage at the time of separation of employment, then both the employee and dependent should qualify for extended benefits. In many cases, even a newborn or adopted child may qualify as a beneficiary. At RMI, we understand exactly who qualifies and will make sure that you meet all of your obligations as an employer.
Determining Qualifying Events
Under Federal law, there are numerous circumstances that could be defined as qualifying events. Some of which include an employee leaving their job voluntarily (including retirement), their hours are reduced to the point that they’re no longer eligible for their health benefits or they are terminated from their job for anything besides gross misconduct. If an employee dies or goes through a divorce, then their spouse will usually qualify for COBRA continuation of benefits.
At RMI, we will discuss your specific situation and decide whether or not an event will qualify. This way, there are no question marks, and you can be sure that you fulfill your obligations as an employer.
When it comes to continuing benefits to qualified beneficiaries, it’s extremely important that you understand the process and effectively administer COBRA. If you’re not sure what to do or simply don’t have the time, please contact us at RMI today. We’ll be glad to help you and will make sure that you remain compliant.