Employee Benefits Continuation of Coverage Rules
Most employers are familiar with COBRA and its rules. COBRA stands for the Consolidated Omnibus Budget Reconciliation Act and it encompasses laws that permit individuals to continue their group health plan coverage(s).
It’s important to review your company’s requirement to comply with COBRA at least annually as your group size increases or decreases. We recommend reviewing it when the medical plan renews. If your group averaged more than 20 employees during the preceding calendar year, you may now need to comply with COBRA. Likewise, if your group decreased in size, your group will no longer need to comply with COBRA.
Also, when renewing plans, it’s important to update the COBRA administrator on new plans or options, member communications and the new premiums. Ongoing, clients should notify their COBRA administrator each time someone joins COBRA-eligible coverage and when that coverage ends for any employee or their dependent.
Helpful link for COBRA compliance: COBRA Compliance Toolkit
State Continuation May Still Apply
Even if a plan is not subject to COBRA, it’s important to note that many states have enacted continuation laws or “mini-COBRA.” Ohio and Kentucky are two states with this requirement, while Indiana and Michigan do not have such a requirement. The rules vary based on the state.
Resources for State Continuation
State continuation rules are different than COBRA rules regarding timing, who is eligible, notice requirements, and time served. We have curated resources you may find helpful on state continuation. Below are items that your ARC advisor can provide upon request that may help you with state continuation compliance:
- Model Notice – Because some states don’t have specific notice language requirements, we have developed one that covers the basics so you don’t have to start from scratch.
- State Continuation Guidelines – We can provide state-specific overviews upon request.
- Outsourcing Options – We now have a third-party administrator for State Continuation who charges a nominal fee.
Your team at ARC is available to help with questions, resources, and vendor recommendations for COBRA or state continuation. Please let your account manager know if you have questions or want to review alternative administrators.
