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What Is COBRA Administration?

To be “on COBRA” means you are using and paying for your most recent employer group health insurance. The federal COBRA law requires businesses that employ 20 or more full-time workers the right to continue their medical plan for a short time.

What does a COBRA Plan Administrator Do?

A COBRA plan administrator is responsible for properly recording, tracking and administering the many steps needed for a business to comply with the law. This includes notifying workers and families, within 45 days of their health insurance stopping, of their right to continue their employer-based health plan.

The administrator assists people in signing up for COBRA continuation, collecting premium payments, restarting coverage with the insurance carrier and processing plan cancellations.

Who Is My COBRA Administrator?

Your COBRA Administrator maybe someone in the employer’s human resources department from which the insurance is through. Though, some companies will use a third-party administrator, also known as a TPA, to manage health insurance continuation plans.

You’ll receive a notification within 45 days of your group health insurance ending from the COBRA Administrator that will manage your plan. If you missed your paperwork, can always call the previous employer and ask the human resources department.

This is who you check with for specific plan questions you may have.

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What Is The 2% COBRA Administration Fee?

Some employers may find it time-consuming or confusing to manage former employee COBRA plans and enrollments. The COBRA law allows third-party administrators to charge an extra 2% to the premiums for their administration services.

COBRA Third-Party Administration

Your COBRA plan may be managed by a third-party administrator. Many employers work with the following:

If you are unsure who your plan administrator is, reach out to the human resources department of the company that provided the health insurance you had.

Is Your Plan Administrator Missing?

Critical Deadlines

A COBRA Administrator’s first responsibility is to notify the employer’s group health insurance carrier of the employee termination within 14 days.

Next, the plan administrator sends election notifications within 30 days containing instructions on how to enroll former workers and their families in a continuation of their former work health insurance plan.

What Is Required In A COBRA Election Notice?

Non-Compliance May Incur Fines By The IRS

The administration of COBRA insurance can be complex. If timelines for notifications are missed, the company providing the insurance may be fined by the IRS up to $200/day for non-compliance.

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If your company is looking to outsource its health and COBRA insurance administration, please contact us.

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