COBRA Compliance

COBRA compliance is vital for employers with more than 20 employees. Every employer who is required to offer COBRA coverage should have a compliance policy in place. Without it, you face the possibility of fines and civil liabilities. ALERT: COBRA audits are becoming increasingly popular with the IRS.

A "COBRA-eligible" employer is an employer who:

has sponsored a group health insurance plan (health, dental, or vision),
and who employed 20 or more full or part-time employees on at least 50% of its typical business days during the preceding calendar year.
Part-time employees count as fractions, so the calculation can be intimidating.

As the employer, you must notify the employee:

of his COBRA rights, within 14 days of loss of coverage.
Provide a Notice of Rights, giving the employee full details, includings costs and time-frames.

COMPLIANCE TIPS: Did you know...

The employee has sixty days from the loss-of-coverage date in which to elect coverage; there can be no break in coverage between plans.
Generally, qualified beneficiaries are eligible to continue COBRA benefit for 18 months, longer if disabled, and, for purposes of insurance, are accorded the same rights as your actively-at-work employees.
COBRA beneficiaries "follow" your group plan until they exhaust their benefit or move onto another employer plan.
Special rules for notification may apply to dependents of qualified beneficiaries.
There are grace periods and other rules that employers may need to be aware of.

We can provide you with cost-effective COBRA compliance, including COBRA policy, initial notice, notice of COBRA rights after the qualified event, ongoing service and support, and adequate record keeping. All you have to do is properly notify us and we will handle everything (business associates agreement required). We provide this service, in some cases, for additional fees. Due to the nature of COBRA complexity for self-funded or self-insured, large group plans, we limit our compliance services to small group employers with fully insured plans only.

Do you have fewer than 20 employees? You will need to provide Colorado state continuation of coverage information to your terminated employees.

Like more information about COBRA in Colorado & Wyoming? Email us!