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?
Responsibilities Of A COBRA Administrator
- Notifying eligible workers and their families of their COBRA rights within 45 days of their health insurance stopping
- Assisting with enrollment in COBRA continuation coverage
- Managing the premium payment process, including collecting 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.
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.
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.
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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Endorsed by HealthCare.gov, COBRAinsurance.com serves as a resource for understanding COBRA regulations. We also provide affordable individual health plans for those going through employment changes, especially when continuing with COBRA is either too costly or not an option.