The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 requires employers of 20 or more full time equivalent employees to offer their employees the opportunity to continue their group healthcare coverage under the employer’s plan, if the coverage would end due to employee termination, layoff, or certain other employment status changes, called “qualifying events.” The continuation of coverage applies to surviving spouses, ex-spouses, and dependents of employees as well.
Employers have certain responsibilities under COBRA and is liable for COBRA failures. Non-compliance can result in financial penalties to the employer.
Sterling offers standard and optional COBRA services. Our fees are based on the employer’s choice of services and the total number of COBRA eligible employees in the company.
Standard COBRA Services
COBRA ADMINISTRATION TAKEOVER AND SET-UP SERVICES
- Work with former administrators to migrate QB information to Sterling, or provide a migration spreadsheet or individual forms to employers.
- Mail COBRA information to current qualified beneficiaries, including premium payment coupons.
QUALIFYING EVENT SERVICES
- Prepare and mail the election package and enrollment form to each new qualified beneficiary.
- Send separate election packages and enrollment forms to dependents, if necessary.
- Track COBRA election timelines and election payments.
- Provide participants with premium payment coupons upon election of COBRA.
ONGOING ADMINISTRATION SERVICES
- Receive and track all COBRA premiums in accordance with applicable grace periods.
- Notify qualified beneficiaries of partial payments, returned checks and non-sufficient funds ACH drafts and appropriate conversion opportunities.
- Mail Notice of Termination of COBRA continuation coverage to qualified beneficiaries upon voluntary or involuntary termination of COBRA.
- Send the General COBRA Notice to new participants.
- Provide online account access to qualified beneficiaries, allowing them to check the status of their payments and due dates.
- Forward one check to the plan sponsor on a monthly basis representing all premiums received for the applicable month of coverage. Sterling will also offer electronic funds transfer (ACH) in lieu of checks, if preferred.
- Provide detailed monthly reports of all COBRA activity to the plan sponsor and online account access to view reports at any time.
Optional COBRA Services
OPTIONAL CARRIER NOTIFICATION SERVICES
- Communicate the Notification of COBRA Election Notice to carriers on behalf of the plan sponsor.
OPTIONAL OPEN ENROLLMENT SERVICES
- Work with the plan sponsor to obtain new plan information, pricing, election periods, enrollment forms, and other information given to active employees.
- Communicate new plan information, pricing, and election periods to qualified beneficiaries.
- Track open enrollment election periods.
- Communicate open enrollment changes to the plan sponsor and/or carrier, if service is selected.