COBRA Compliance

Administering COBRA and premium collection – it’s much more than just telling employees or dependents they can stay on your health plan, but it doesn’t have to transform your entire workday into a wrestling match with COBRA paperwork either.

To get a better idea of your COBRA state of affairs, use the following checklist to see how well you meet the stringent IRS COBRA Regulations. Or where you may be making costly COBRA errors.

COBRA Compliance Requirements Under TAMRA (you need to check off 4 to pass the TAMRA portion of an IRS audit, all four check marks are necessary)

  1. Proof of COBRA training
  2. Written COBRA procedures (manual with instructions)
  3. Documentation of program design (1986 or 1987) and program updates (to present)
  4. Documentation of program monitoring

COBRA Notifications (9 check marks indicate a complete COBRA program – new IRS regulations effective 1/1/02, require updating of all notification language.)

  1. Initial Notification (1986-87 overall mailing, 1990 remailing, mailings to new enrollees to date)
  2. Qualifying Event Notification
  3. Secondary Event Notification
  4. Disability Extension Notification
  5. Conversion Notification (required if your group health plan has a conversion option)
  6. Open Enrollment Notice
  7. Expiration Notice (recommended-not a specific requirement)
  8. Insignificant premium underpayment procedure (possible notice)
  9. Disclosure to health care provider

Accepting Elections and Premiums (5 check marks indicate proper compliance)

  1. Premium billing procedures (optional-not a requirement)
  2. Insignificant premium underpayment procedure
  3. Complete & accurate disclosure to health care providers
  4. Cancellation procedures (voluntary and involuntary)
  5. Verification of correct election

Documentation Systems (5 check marks are necessary to PROVE compliance if challenged

  1. Documentation of each notice sent
  2. Documentation of COBRA dates (12 dates possible per beneficiary)
  3. Documentation of Notification language updates (1986 to present)
  4. Documentation of procedural updates (1986 to present)
  5. Documentation of events reported to employer/plan administrator for divorce/dependent events and disabilities

Based on your answers from the above checklist, you may want to outsource your COBRA compliance program.  We offer an in house program called COBRA Solutions.

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