The U.S. Department of Labor has mandated extended periods for qualifying individuals in ERISA groups who experience a COBRA-qualifying event to elect and pay for COBRA.
- Individuals have 60 days from notice of their COBRA rights to make a COBRA coverage election. Under the mandated extension, those 60 days will not include the period between March 1, 2020, and a date 60 days after the national emergency ends.
- Individuals who elect COBRA coverage have 45 days after the election to pay their premium to bring them current from the effective date through the date they pay. Under the extension, the period from March 1, 2020, through 60 days after the end of the national emergency will not count toward those 45 days.
- COBRA members usually have a 30-day grace period for each month’s premium payment, but, under the extension, none of the days between March 1, 2020, and 60 days after the national emergency’s end count as part of that 30-day grace period.
Some groups have interpreted the mandate to mean that COBRA subscribers’ claims must continue to be processed during the extensions, even in the absence of premium payment. However, the extensions only provide a longer time for individuals to elect COBRA and pay their premium.
We are legally bound to process claims in a timely manner for members whose premiums are current, so we are following our standard policy in fully insured business for COBRA members who are in arrears. If an individual falls behind on their premium, claims for services beyond the date for which premium has been received will be denied pending payment. At any time during the regular period or 60 days after the end of the national emergency, members can pay to reinstate their coverage and have all claims reprocessed.
Self-funded groups must choose how to handle pending claims. The standard option is for claims to be denied pending payment, and coverage reinstated upon receipt of premium, as is done with fully insured groups. The second option allows the member to remain active and have only their medical claims pended. Under this option, prescription, pharmacy and vision claims will continue to be paid and billed to groups, accruing toward stop loss. If a member’s coverage is later terminated retroactively, the paid claims will go through the standard recovery process. That process can take up to two years, and the success of recovery attempts may depend in part on providers’ contract terms.