COBRA Compliance Toolkit
Employers should be aware of all their COBRA obligations, procedures, and timelines to ensure they remain in compliance with government regulations. Failure to comply with COBRA can lead to significant financial consequences.
COBRA Online Guides/Tools
COBRA Rate Renewal Form
If your rates are expiring soon for one or more of your health plan, OCA wants to know. Generally, your active employees will have an “open enrollment” opportunity during the month prior to renewal.
Enrollments & Terminations
Access OCA’s online employee enrollment, change, and termination form to quickly submit employee COBRA events. The secure online form is quick and easy and eliminates the need for paper submissions.
Access COBRA Portal
Through OCA’s myRSC COBRA portal you can stay up to date on COBRA notices and documents, premium payments, elections, and more.
Employer COBRA Premiums Via ACH
With the electronic payment option it can help reduce the headaches of having to mail COBRA checks each month! Simply complete the below information and OCA will set up your account so that COBRA payments can be directly deposited into your employer bank account!
OCA’s ARPA Invoice Alert
OCA’s ARPA Invoice Alert October 2021 With the American Rescue Plan Act (ARPA) and its COBRA subsidies…
2022 Open Enrollment Communications
Open Enrollment (OE) Client Communication Timeline With many of our clients renewing their benefit…
OCA’s ARPA Communications
Since ARPA was signed into law on March 11, 2021, OCA has been committed to being transparent and keeping…
Online COBRA Payment
COBRA participants or individuals participating in an employer sponsored Retiree or Direct Billing plan can now make their premium payments online via our COBRA portal. Click the button below to learn how easy the online payment process can be!Learn More
COBRA Explainer Videos
COBRA in a Nutshell
Plans Subject to COBRA
What is a Loss of Plan Coverage?
What Triggers COBRA and Who’s Offered
COBRA Election Process
COBRA Election Timeline
Making COBRA Premium Payments
What is COBRA?
COBRA generally applies to all private-sector group health plans maintained by employers that had at least 20 employees on more than 50 percent of its typical business days in the previous calendar year. Both full-time and part-time employees are counted to determine whether a plan is subject to COBRA.
-Caution, even if the employer has less than 20 or more employees today, you still may be subject to Federal COBRA requirements
-What we commonly call “COBRA coverage” technically is “group health plan continuation coverage“. Under COBRA, an individual who might otherwise lose coverage under a group health plan can pay to continue that coverage for a limited time
-State Continuation laws may apply for employers under 20
Ex.) NJ & NY
What Plans Are Subject to COBRA?
COBRA applies to group health plans. COBRA generally applies to the following plans:
Self-Funded Health Plans
Health Reimbursement Arrangement (HRA)
Employee Assistance Plans
Drug or Alcohol Treatment Programs and Health Clinic
Prescription Drug Plans
What Triggers the Obligation to Offer COBRA Coverage?
Generally, when a triggering event causes a loss of plan coverage, there is a qualifying event in which COBRA must be offered.
Termination of a covered employee’s employment
A reduction of a covered employee’s hours of employment;
The death of a covered employee;
A divorce or legal separation from the covered employee;
Ceasing to be a dependent child under the terms of the plan;
The covered employee’s becoming entitled to Medicare; and
Employer bankruptcy (this relates only to retiree plans).
Note: The triggering event of termination of employment does not include termination for gross misconduct.
Who Must Be Offered COBRA?
Every qualified beneficiary who will lose group health plan coverage as the result of a qualifying event must be offered the opportunity to elect COBRA within the election period.
To be a qualified beneficiary, a person generally must satisfy two conditions:
the person must be a covered employee, the spouse of a covered employee, or the dependent child of a covered employee; and
the person must be covered by a group health plan immediately before the qualifying event (the triggering event).
Penalties of up to $110 Per Day (per violation) plus the cost of medical expenses incurred by the qualified beneficiary may be imposed Under ERISA for non-compliance
What is a Loss of Plan Coverage?
A loss of group health plan coverage means “to cease to be covered under the same terms and conditions as in effect immediately before the qualifying event.”
A loss of coverage includes:
-an increase in required premiums;
-a reduction of benefits; and
-any other change in the terms or conditions of coverage.
What Type of COBRA Coverage Must Be Offered?
COBRA coverage must be identical to the coverage provided to similarly situated beneficiaries under the plan(s) under which a qualified beneficiary was covered before the qualifying event.
If a plan has an open enrollment period for active employees, this must be made available to COBRA participants and qualified beneficiaries as well.
Length of COBRA Coverage
COBRA coverage generally starts on the date of the qualifying event (that is, on the date of the triggering event). And generally, COBRA coverage can last for the “maximum coverage period.”
The maximum coverage period varies according to the type of triggering event, as the following illustration shows.
18 Month Maximum Coverage Period (Employees and dependents)
-Termination of Employment
-Reduction of Hours
36 Month Maximum Coverage Period (Dependents Only)
– Death of Employee
– Divorce or Legal Separation of Employee
– Child’s loss of dependent status
– Employee’s entitlement to Medicare
COBRA Election Process
The COBRA election process begins with a notice to the plan administrator that a qualifying event has occurred.
The employer must notify the plan administrator when a qualified beneficiary loses or will lose coverage due to:
-termination, or reduction of hours, of a covered employee’s employment;
-death of the covered employee;
-the covered employee’s becoming entitled to Medicare; or
-the employer’s bankruptcy
The employer generally must notify the plan administrator (OCA) within 30 days after the triggering event.
OCA must provide the election notice generally within 14 days after receiving a qualifying event notice.
COBRA coverage is not automatic. Each plan must set a COBRA election period that begins no later than the date that plan coverage is lost and lasts at least until 60 days after the date that group health plan coverage is lost or if later, the date that the plan administrator provides the COBRA election notice.
1. Employee has an applicable qualifying event (QE)
2. Employer must notify OCA generally within 30 days after the QE
3. OCA must give election notice within 14 days after notice of QE
4. Qualified Beneficiary (QB) must elect COBRA within election period
5. QB must make initial premium payment within 45 days after election was made
COBRA Premiums Payment Deadlines and Other Rules
A plan may not require payment of the initial premium earlier than 45 days after the qualified beneficiary elects COBRA. After that, premiums generally are due on the first day of each month, subject to a grace period. The grace period must be at least 30 days.
A plan may terminate COBRA coverage for nonpayment or insufficient payment of premiums after the expiration of any applicable payment or grace period.
Premium Collection & Remittance Process
We’re happy to announce that we can now receive COBRA premium via ACH and/or Credit Card from COBRA Participants as well as remit COBRA premium payments via ACH back to our employers.
OCA’s COBRA Participant Premium Payment Options
– Check Payments
– ACH Payments – $2 per ACH draft fee will be added
– Credit Card Payments – 3% surcharge will be added
Employer pays premium
– OCA’s Employer Premium Remittance Options
– OCA remits either via check or ACH twice per month
– ACH Payments are listed as “dfs Flex “ on employer bank statement
– Reports will be mailed to the employer either way identifying who the premium remittance was for