Helping employees transition out of group health
benefits can be challenging. It can be even more so for
small businesses trying to sort through COBRA and/or
Cal-COBRA rules. This month, we present a refresher on
this topic.
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Requirements Refresher |
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Paperwork, paperwork! Make sure you do all the
necessary Cal-COBRA / COBRA paperwork for your
departing employees. First, here's a refresher on
the basics.
The Consolidated Omnibus Budget Reconciliation Act
of 1985 protects the rights of individuals who would
otherwise lose group health coverage.
It requires employers to provide the opportunity for
covered employees and their eligible dependents to
continue coverage at group rates (plus an
administrative percentage) after certain qualifying
events, including termination of employment or
reduction in working hours.
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Cal-COBRA Information and Notifications |
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Groups with 2-19 employees during at least
half of the previous calendar year are subject to
Cal-COBRA law under the state of California.
Cal-COBRA also applies to federal COBRA
participants who have exhausted their coverage.
Employer Responsibilities
For Cal-COBRA, the employer must notify the
health plan of the employees loss of group health
care coverage eligibility within 30 days of
termination of employment or reduction in hours. In
some cases, an additional form is required. (See the
forms section below.)
Health Plan Responsibilities
The health plan notifies the subscriber of the
availability of Cal-COBRA and handles the
administration.
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Federal COBRA Information and Notifications |
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Groups with 20+ employees during at least
half of the previous calendar year are subject to
federal COBRA law.
The 20-employee count includes full-time
employees plus each part-time employee counted as a
fraction of hours worked per full-time workday or
pay period. (For example, a part-time employee
working 30 hours a week where full-time is 40 hours
would count as 0.75 employees.)
Employer Responsibilities
For federal COBRA, the employer is responsible
for notifying the employee of eligibility for COBRA,
among other responsibilities.
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HIPAA Coverage |
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When advising an employee or dependent of his/her
rights to continue coverage under COBRA or
Cal-COBRA, employers must ensure that the employee
or dependent understands that failure to elect
COBRA/Cal-COBRA will result in ineligibility for
HIPAA guaranteed issue coverage in the future.
HIPAA, the Health Insurance Portability and
Accountability Act of 1996, requires that insurers
guarantee issue to individuals who have had
significant (and continuous) coverage in the small
group market immediately prior to applying for
individual coverage, regardless of health or other
factors.
Unless covered under another group plan, to
remain eligible for HIPAA plans, the individual must
fully exhaust their COBRA/Cal-COBRA benefits.
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Special Note |
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The information here is presented as a courtesy
reminder for our clients of employer COBRA and
Cal-COBRA responsibilities. It is not a
comprehensive summary of those requirements, nor is
it intended as legal advice.
If you have additional questions, please refer to
the appropriate government site, your legal advisor
or human resources consultant.
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Help us help you! |
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Help us serve you better! If you run into
a challenging benefits issue, let us know! We'll
work with you to find a solution-and help others.
Thanks for being our client! We appreciate your
business.
We want to make your job easier. Call us at
800.733.8692 or...
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