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COBRA & ARRA
COBRA The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 is a complex law with unique administrative challenges for employers. Severe penalties for non-compliance place employers at risk if they are unable to manage the administrative process in accordance with ever-changing COBRA regulations. Brown & Company does not administer COBRA and strongly recommends that all our clients outsource COBRA administration to minimize their potential financial and legal liability due to non-compliance with the law.
COBRA Regulatory Resources
CONEXIS https://www.conexis.org/compliance/
CERIDIAN http://www.ceridian.com/employee_benefits_nav/1,6267,15691,00.html
Common COBRA mistakes that increase risk for employers:
- No up-to-date COBRA manual.
- Not providing or having an Initial Notice of COBRA Rights.
- Not providing the Qualifying Event Notice.
- Not maintaining proof of compliance.
- Making a decision that "feels right."
- Making exceptions to the plan documents and then not applying exceptions consistently under similar circumstances.
- Not offering COBRA for other coverage such as dental, vision, EAP (Employee Assistance Program) and FSA (Flexible Spending Account).
- Overlooking the COBRA continuants at open enrollment.
- Not understanding COBRA in regard to FMLA (Family and Medical Leave Act).
HELPFUL LINKS
COBRA Administration Flow Chart
US Department of Labor Model Notices
Certificate of Mailing --when you need to verify that you've sent a letter or package. Available through the USPS (www.usps.com). Price is $1.15 for individual articles and provides a receipt that shows evidence of mailing and can be purchased only at the time of mailing. And don't lose it! It's the only official record available.
American Recovery and Reinvestment Act of 2009
On February 17, 2009, The American Recovery and Reinvestment Act (ARRA) of 2009 was signed by President Obama. This and subsequent legislation includes a premium assistance program to help eligible individuals involuntarily terminated between September 1, 2008 through May 31, 2010 afford COBRA premiums.
This new legislation will alter the way that COBRA and certain state mandated continuation plans are administered through 2010.
For ongoing updates and model notices, visit the Department of Labor website at http://www.dol.gov/ebsa/COBRAmodelnotice.html.
THESE LINKS AND PUBLICATIONS ARE FOR INFORMATIONAL PURPOSES ONLY. IT DOES NOT CONTAIN OR CONVEY LEGAL ADVICE.