Tag: COBRA

September 15 to October 15 is National Hispanic Heritage Month

National Hispanic Heritage Month is the period from September 15 to October 15 in the United States, when people recognize the contributions of Hispanic and Latino Americans to the United States and celebrate the group’s heritage and culture.

Started as Hispanic Heritage Week by president Lyndon Johnson in 1968, September 15 was chosen as the starting point for the celebration because it is the anniversary of independence of five Latin American countries: Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. All declared independence in 1821. In addition, Mexico, Chile and Belize celebrate their independence days on September 16, September 18, and September 21, respectively.

As a Minority Business Enterprise (MBE), one of our core beliefs as a company has always been to celebrate diversity and inclusion. Sterling Administration supports our Spanish-speaking Employer Clients and Members with services including a Spanish language option for our full-service website, online enrollment, educational materials, forms, and customer service.

¿Habla Español?
Nuestro compromiso con los latinos no es simplemente hablarles en español, sino realmente entender y hablar su mismo idioma. Aprende más.

Are you an Industry Partner with clients looking for a solution in Spanish?
Contact us today to learn more.

For Producer Partners & Employers: COBRA – Am I Doing it Wrong?

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 (referred to as “qualifying events”). This includes any event that changes the employee’s eligibility for benefits except gross negligence. The continuation of coverage applies to surviving spouses, ex-spouses, and dependents of employees as well.

Even though the law impacts healthcare insurance, COBRA is an “employer law.” This means that the employer has certain responsibilities under COBRA and is liable for COBRA failures. Non-compliance can result in financial penalties to the employer. Below is a 10-question quiz to test your knowledge.

  1. COBRA is a ___________ law.
  2. There are as many as ______ types of notices a qualified beneficiary could receive.
  3. _________ can pay anyone’s COBRA premium.
  4. Define the 10 potentially qualified beneficiaries: ____, ____, ____, ____, _____, ____, ____, ____, ____, _____.
  5. _____________ is required at the tail end of COBRA.
  6. ____ states have state continuation requirements.
  7. Employers are subject to COBRA if they have ____ employees on ______________ days of the preceding calendar ____. Both full and part time (counted as a fraction of an employee, with the fraction equal to the number if hours that the part-time employee worked divided by the hours an employee must work to be considered full-time) employees are counted to determine whether a plan is subject to COBRA.
  8. _________ are required to maintain written processed and procedures related to how and when they notify participants of their initial COBRA rights, how and when qualified beneficiaries are informed of their rights and responsibilities and timelines.
  9. Employers have up to ______ days to notify their COBRA administrator (if they have one) of qualified events, the administrator has an additional ____ days to notify the qualified beneficiaries, another ____ days to elect COBRA, and another _____ to send in all retroactive payments.
  10. If a qualified beneficiary is choosing between COBRA and the marketplace, they need to consider that COBRA is _________ while the marketplace is _________.

COBRA Quiz Answers

  1. Federal employer
  2. 15 (Only four are required of which three are provided by the TPA. The QBs could receive more than that including coupons, subsidy notices, plan change notices, etc.) 1) General Notice/Initial Rights Notice 2) Election Notice 3) Notice of Unavailability 4) Notice of Termination of Coverage
  3. Anyone
  4. Active employee, termed employee, retired employee, dependents, officers, directors, self-employed individuals, partners in a partnership, agents, independent contractors
  5. State continuation
  6. Forty
  7. Twenty or more; most regular business; year
  8. Employers
  9. 30; 14; 60; 45
  10. Retroactive; prospective

The proper notices and tedious recordkeeping involved with COBRA make it a perfect opportunity for outsourcing to Sterling to provide COBRA administration.

Sterling Administration can establish and maintain an integrated COBRA and HIPAA system for employers. We can manage and control plan administration, required documentation, and adherence to the law’s eligibility requirements, working with the employer.

Learn more about our standard and optional COBRA services.

So What Happens to COBRA Now That the Exchanges Are Up and Running?

by Chris Bettner

Editor Note: This article was written by Sterling’s EVP of Business Development Chris Bettner and published in the May 2014 edition of Health Insurance Underwriter Magazine.

People are always asking us about the longevity of COBRA as it relates to public and private exchange options for terminating employees and employer groups. People are wondering what will become of this product over time? Business Insurance Magazine reports (3/4/14), that private exchanges have hit the 1 million mark as of early January 2014. Over four times that number enrolled through the federal and state exchanges.  Federal subsidies outside of the exchange are now available for policies bought on the open market, according to the New York Times (2/28/14).

Who truly knows how all of these changes in healthcare insurance will impact COBRA as we know it today, but unless there are also changes to the federal COBRA law, it’s likely to be here to stay. Employers must offer COBRA continuation to their terminating employees regardless of other forms of coverage now available to them, such as the exchanges. The administrative burden and steep penalties to employers for errors still apply to COBRA for any employer of 20 or more employees.

One thing we know people are experiencing with the exchange option is narrow networks.”  If an employee has been under care or using a particular provider or hospital, that provider or hospital may not participate in the carriers’ products in the exchange. This may affect the choices a terminating employee makes. Qualified beneficiaries may find subsidized options on the open market for the same cost or less than the exchange and have access to a network that includes their preferred providers.

People who need coverage elect COBRA for multiple reasons based on their healthcare needs and financial considerations. Others may choose not to elect COBRA and choose another form of coverage. With the option of coverage under the exchanges today and the removal of pre-existing conditions as a reason to deny coverage, affordable plans can be found through the exchange. Sometimes the cost differential is significant but sometimes it is not, depending on type of coverage and other demographic information.

The real change in COBRA is not whether employers need to continue buying the administration of COBRA through a qualified administrator, but whether terminated employees will elect it or opt for a plan through an exchange. Employers need the peace of mind that they are in compliance with COBRA federal guidelines, timelines, etc. as it applies to any qualified beneficiary. The administrator may see a reduction of the 2% of premium that they can withhold due to participation, but I would not suggest reduction in the administration of COBRA for employer groups to which it applies. COBRA is a service as well as an option and an employer law.

About Chris Bettner
With over 20 years of experience in healthcare sales and management with health insurance carriers, Chris Bettner serves as Executive Vice President of Business Development for Sterling Health Services. She joined the company in 2004. Prior to Sterling, Chris was Vice President of Sales for Blue Shield of California. She held similar positions at Lifeguard, FHP, Independence Blue Cross and MetLife. Chris is also a national spokesperson on HSAs and consumer directed healthcare programs.

For Employers: How to Manage Your COBRA Accounts Online

Sterling Health Services is pleased to offer options for you and your employees to manage your COBRA accounts online. In this video, you will find a step-by-step guide.

Learn more about Sterling and our COBRA services.