Does COBRA Still Matter Post ACA?

A lot has happened over the past few years. The Affordable Care COBRAAct, or ACA, has transformed the way millions of people obtain health insurance coverage for themselves and their families. But it’s a complicated law, with a lot of moving parts. Many consumers, workers and human resources professionals/employers are confused about whe
re their role in covering workers ends and the ACA begins. This is particularly true in instances where a worker has left the job and is no longer eligible for coverage under the employee group plan. Here are answers to some of the most frequently asked questions:

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What Happens If There is a Breakdown of COBRA Compliance?

At some companies, there may not be a well established system in place for handling the tasks necessary to comply with COBRA. Here’s a brief overview of COBRA as well as a question from a concerned employer about the implications of not complying, along with a detailed answer.

COBRA Basics
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives eligible workers and their families who lose their health benefits the right to choose to continue group health benefits for limited periods of time under certain circumstances. The life events that enable an individual to become eligible for COBRA include voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death and divorce. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan. — The U.S. Department of Labor

Question: Our company sponsors a group health plan for its employees. What are the consequences if we fail to comply with COBRA?

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FMLA Coverage and Missed Benefit Payments

yes-238374_1280An employee on unpaid Family and Medical Leave Act (FMLA) leave agreed to pay his share of premiums for coverage under the company’s major medical plan by sending in personal checks.  However, he has missed the due date for the first payment.  Can the company drop him from coverage, and if so, when?

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COBRA for Employees’ Family Members

family-730320_1280When an employee drops dependents and spouses from our company’s group health plan during open enrollment, we provide the dropped individuals COBRA election materials.  But our new COBRA third-part adviser is telling us that we don’t have to provide a COBRA election notice to dependents and spouses who are dropped at open enrollment.  Is our plan required to offer COBRA coverage to these individuals?

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Court: Missing COBRA Notice Led to Hefty Legal Penalties

Just how important are COBRA notices when an employee leaves your company or organization?  One employer learned the answer to this question when a proper and timely notice was not provided and a former employee sued.  Here’s what happened in one recent case.

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