Current Business Environment

We recognize that with the constantly changing COVID-19 situation around the world, this is an unprecedented time for everyone — a time that, for many, is filled with uncertainty. Our hearts and thoughts go out to each and every one or our software users.

I want you to know you have our commitment to continue providing you with the products and services you depend on. For more than 25 years, COBRA Solutions, Inc. has focused on maintaining your compliance with numerous employee benefit laws. This enduring mission guides us as we closely monitor, assess and respond to this situation.

As a valued customer, we want you to know that we understand the importance of the products and services we provide to you and your business. You rely on us to help power your livelihood, and we understand the responsibility that entails. Meeting that responsibility day in and day out, in any environment, is our primary focus.

In response to the current situation, we’ve implemented our business continuity plan — which examines all areas of business operations and have taken actions to ensure continued service to our customers. Rest assured, we are prepared to serve you.

First and foremost, our plan ensures the health and safety of our employees, so we can continue to deliver and support the products you count on. Considering the most recent news and announcements from the World Health Organization (WHO) and Centers for Disease Control and Prevention (CDC), we have made the decision to have employees in our office who can perform their jobs remotely, work from home for the foreseeable future.

These precautionary measures have been taken to limit the potential spread of the virus, to support our employees in this challenging time and to ensure we maintain our ability to serve you, our customer, for the long term. Our senior leadership team remains vigilant and is monitoring the situation in real time and responding rapidly as conditions evolve.

Please be safe and stay healthy.

New Department of Labor COBRA Letters

Recently, the Department of Labor release new revisions of the DOL General Notice and DOL Qualifying Event letter. Upon our initial review, we found mainly wording changes, not changing the expressed meaning of the notifications. It seems the new letters replaced more complex words with “more common” variations.

To receive these new letters, you will need to perform an update. The most common method for obtaining the update is to:

1. Under the File menu, select the “Update Software via Internet” option. (If Microsoft Windows asks if you wish to start as “Administrator,” select “No.”);
2. Click the Next button to access the files;
3. You will be asked if you wish to review the new letters. You can select the desired letter and you will be shown the changes in red text.
4. Click the Next button and you will be provided a button to select the letters you wish to update and the groups that will be updated. If you do not select the letters (which is not recommended), they will not be updated in your system.
5. If you are a Third Party Administrator and make your own changes to the notice, you may want to just update one group. Upon completion, you can add/remove information as you wish and they save the document. Once saved, you may go under Notifications > Copy Letters to Other Groups. Select the altered letter(s) and the groups you wish to update and click the Copy Now button.

Upon completion, you will be given a Congratulations message and the COBRA software will restart.

If your firewall blocks you from obtaining the update through the software (as described above), you can directly download it by visiting www.cobrasolutions.com/firewall.

1. Click on the “Updating Version 20 when you have a firewall;
2. Follow the instruction on the web page;
3. Under step #3, you will be asked to provide a password for the update.  The current password can be found in the emailed version of this newsletter (right column).
4. Continue to follow the steps followed by entering the COBRA Administration Manager and replace the current letters with the new ones. (If you are a TPA, you may want to update just one group first, following step 5 above.)

When Administrating COBRA it is Best to Stick to the Guidelines

We frequently receive questions regarding whether or not to make exceptions to COBRA guidelines regarding late payments, late elections, etc. Being sensitive or compassionate to an individual’s situation is typically good practice; however, with COBRA it is best to stick to the guidelines. When you make exceptions to the COBRA rules you are setting a precedent – that means you will also need to apply it to all future instances. Following are a few examples where employers should give careful thought and consider sticking to the COBRA timeframes:

COBRA Premiums
COBRA has set time frames for the qualified beneficiary (QB) to make their COBRA premiums; there is a 45 day grace period for the 1st payment and then a 30 day grace period thereafter. If a QB requests that you accept a late payment, the employer should consider sticking to the rules and not allow for the additional time. The exception here would be an insignificant premium underpayment or incapacity (mental or physical incapacity that makes an individual unable to act or respond).

Secondary Qualifying Events
To be eligible for a secondary qualifying event (death, divorce or legal separation, loss of dependent status or Medicare entitlement) the qualified beneficiary has 60 days to notify the plan administrator of the secondary event. The 60 day clock does not start until the employer provides the notice for this event. If the QB notifies the employer outside of the 60 day time frame the employer should confirm that the notice was provided to the QB in a timely manner. If so, then it would be prudent to adhere to the 60-day timeframe.

Disability
This extension allows a qualified beneficiary to lengthen COBRA from 18 months to 29 months if the following requirements are met:

A Participant must have been disabled (prior to or) within 60 days of the COBRA start date. The Social Security Administration will make the determination as to the eligibility for Social Security benefits and notify the individual if they are considered disabled. The participant needs to provide a copy of this determination prior to you offering the 11 month extension.

During this disability extension period the employer can charge up to 150% of the COBRA premium. It is important for the employer to remain consistent and charge all qualified beneficiaries the 150 percent or the determined amount for the disability extension period.

Providing COBRA beyond 18 months
In some cases an employer might feel sorry for the situation a qualified beneficiary is in and want to extend the COBRA coverage over the 18 month time frame. COBRA has established timeframes for each event. For termination and reduced work hours COBRA provides 18 months of coverage. For other events like death of employee, divorce and loss of dependence status COBRA provides 36 months of coverage. Extending these timeframes is not in the employer’s best interest and may lead to establishing an unwanted precedent. Especially since the insurer may not allow it.

Late Elections
Qualified beneficiaries must be given at least 60 days for the election. This period is measured from the later of the coverage loss date or the date the COBRA election notice is provided by the employer or plan administrator. The important aspect of this is to view the postmark date on the election as the official date to use in these circumstances. Again, accepting an election notice past the 60 day election period is not good practice. You definitely do not want to set a precedent with the election period.

If an employer does decide to make an exception to the COBRA rules, they should consider the negative and positive consequences of the rule and determine how the decision would impact a precedent and the likelihood of the circumstances being repeated. The employer also must confirm with the insurer if making exceptions outside the COBRA rules to make sure they would be allowed. Lastly, make sure to communicate with everyone involved and document the reasons justifying the exception.