COBRA COMPLIANCE
Take this short test to see if you are making some of the most common COBRA mistakes.
1. Do you have a COBRA Policies and Procedures manual? Has it been updated to reflect the requirements of the COBRA final regulations from 2004?
2. Do you send written Initial Notifications of COBRA rights to all of your employees and their covered dependents, to their home address, when they first become covered under your plan? If so, can you prove it?
3. Have you trained specific individuals to answer COBRA questions from employees or dependents? If so, have all of these conversations been documented? Do you have established procedures to document all conversations?
4. Have you ever refused a late COBRA payment? If so, could you prove that it was late? Could you prove that you had not accepted untimely elections or payments from other employees in the past?
5. How would you handle COBRA procedures if you discovered an undocumented illegal alien employee?
6. Do you know the difference between HIPPA “privacy” requirements and HIPPA “security” requirements?
IF you answered “no” to any of these questions, you could have a problem. The above areas are some of the most litigated mistakes made my employers and their Human Resource personnel. I’m sure you know COBRA is a complex federal law dealing with continuation of insurance coverage. Compliance is burdensome, and the penalties for non-compliance are steep, with employer fines of up to $500,000 or 10% of group health plan costs. COBRA laws are constantly changing, the language is difficult to read and harder to interpret. With the IRS, the burden of proof lies with you. Plus, unnecessary COBRA claims are costly and most often are the responsibility of the employer rather than your insurance carrier.
If you employ 20 or more full or part-tome employees on at least 50% of your typical business day, more than likely, you are required by federal law to comply with COBRA.
Mike Edwards Benefit Group Inc. can help your company realize tremendous cost savings through re-focusing human resource efforts. We are confident you will find us to be a reliable part of your Human Resource team. If you’d like further information, feel free to call our office at 205.647.4775.