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 effectively recording, tracking, and overseeing the necessary steps for a business to comply with COBRA law.

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

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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.

COBRA Third-Party Administrators

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?

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.

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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Short-term health insurance may be used as an alternative to COBRA. The plan premiums are affordable and the co-pays are predictable as coverage is limited to new illnesses and injuries.

These plans renew every month and you may cancel at any time.

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