CBIZ has been ranked the Nation’s Number One Benefits Specialist provider since 2001. CBIZ provides outsourcing services across the nation to employers of all sizes and complexities.
Toll Free Number
800-815-3023, option 6
PO Box 20
Roanoke, VA 24002
310 First Street
Roanoke, VA 24011
The Consolidated Omnibus Budget Reconciliation Act of 1985
If you employ the equivalent of 20 or more full or part-time employees, you may be subject to COBRA regulations mandating that you offer a temporary continuation of group health and certain Section 125 benefits to employees and covered dependents upon experiencing a qualifying event.
Covered health plans are those group plans maintained by the Employer for the benefit of the employee and their dependents. The plans must provide health coverage including diagnosis, cure, mitigation, treatment or prevention of disease and any other undertaking for the purpose of affecting any structure or function of the body. (medical, prescription drug, dental, vision, certain EAP’s, and health flexible spending accounts)
A covered employee for the purpose of COBRA continuation is any individual covered under the group plan the day immediately prior to the qualifying event. (covered: employee, spouse and dependent children and any child born to or placed for adoption with, the covered employee during the period of continuation)
The participant is required to pay the full premium (plus 2% adm fee) to continue the coverage for the appropriate length of time. The first payment is due 45 days from the date of the election of coverage retroactively back to the first day of loss of coverage. Each month thereafter, the participant must remit a monthly premium on the first of each month (30 day grace period for each month).
What equates to one full-time employee? How long is temporary? What is a qualifying event? CBIZ COBRA services can answer all of these questions as well as provide a turnkey COBRA administration service that will increase your productivity, reduce your liability and save you money on your insurance premiums.
COBRA administration is more than sending letters. A comprehensive administration service offers total notification process, tracking and documentation, premium payment management, and reporting.
CBIZ COBRA takes pride in offering excellent customer service to the client as well as plan participants. We take the time to research questions and offer solutions to the caller.
There are 6 triggering events...
|Event||Length of coverage|
|Termination of a covered employee's employement||18 months|
|Reduction of hours of employment||18 months|
|Death of a covered employee||36 months|
|Divorce or legal separation from a covered employee||36 months|
|Ceasing to be a dependent child under the terms of the plan||36 months|
|Covered employee becoming entitled to Medicare||36 months|
CBIZ - COBRA Services
- Send by regular U.S. Mail the COBRA initial notice required by Internal Revenue Code Section 4980B and ERISA §§601-608 to those employees identified to CBIZ COBRA by the Employer
- Send by regular U.S. Mail COBRA notification letters to each qualified beneficiary identified to CBIZ COBRA by the Employer
- Monitor each notified qualified beneficiary’s enrollment period and first and continuing payment due periods and send a COBRA termination notice if the qualified beneficiary's COBRA enrollment forms and/or payments are not received within COBRA time limitations
- Maintain qualified beneficiary COBRA premium accounts for the processing of monthly COBRA premium payments
- Report to the Employer the qualified beneficiaries enrolling for COBRA coverage and/or report to the carrier enrollments and terminations (carrier notices - optional service)
- Monitor secondary COBRA events for participating qualified beneficiaries with spouse/dependents
- Send by regular U.S. Mail COBRA coupons to the participating qualified beneficiaries
- Send by regular U.S. Mail to the pending and participating qualified beneficiaries a notice of any rate change identified to CBIZ Payroll by the Employer
- Send by regular U.S. Mail to each participating qualified beneficiary a notice of the date when their COBRA coverage will be exhausted and another notice confirming termination of their COBRA coverage
- Send by regular U.S. Mail a HIPAA Certificate of Coverage in accordance with the Health Insurance Portability and Accountability Act (“HIPAA”) to a qualified beneficiary if the Employer provides relevant HIPAA information to CBIZ Payroll (optional service)
- Send by regular U.S. Mail a notice to a participating qualified beneficiary turning age 65 concerning their Medicare eligibility and the loss of COBRA coverage
- Send by regular U.S. Mail a collection letter if a check from a participating qualified beneficiary is returned as N.S.F. notifying them that their COBRA coverage will terminate
- Send by regular U.S. Mail payment reminder and late payment notices to participating qualified beneficiaries
- Report to the Employer the COBRA premiums received by CBIZ COBRA from participating qualified beneficiaries
- Send the COBRA premiums received by CBIZ COBRA from participating qualified beneficiaries to the Employer in the form of a check included with the monthly reports
- Provide client online web services including account preview, information entry, reporting, and QB online access.
- Provide three methods of information transfer; form faxed, web entry, or file transfer options.
All notices reference above are sent via US first class mail to both the enrollee and family (if any) to the last known address. (proof of mailing certified through the CBIZ Distribution Center)
- When a individual (qualified beneficiary) loses group health plan coverage due to a qualifying event the qualified beneficiary may elect to continue group health plan coverage for a limited time on a self pay basis without going through a new application or underwriting process..
Employers Subject to COBRA
- Almost all group health plans that provide health care of private and public employers must comply with COBRA. Certain small employers such as church plans and federal government plans are not subject to COBRA.
- An employer is required to offer cobra if they have 20 or more active employees in their previous calendar year. All employees must be counted, not just those covered by the employers health plan. Part time employees are counted as well.
- Cobraapplies to group health plans. Generally, a group health plan is a plan that satisfies two criteria:
- It provides medical care; and
- It is maintained by the employer
- What does Medical Care include? It includes medical, vision, and dental as well as prescription drug treatments.
- What does maintained by the employer include? Plans subject to COBRA include much more than medical insurance arrangements maintained by employers for example;
- Group insurance plans in which employees pay the premiums
- Treatment programs (chiropractor benefits)
- Self insured medical reimbursement plans
- Employee assistance programs
- Health flexible spending arrangements offered as part of a cafeteria plan (medical only)
- Discount programs
- Wellness programs
- When a covered employee is terminated for gross misconduct, there is no qualifying event for the covered employee, or for the spouse or dependent children. The law is uncertain and fact specific. Plan administrators should seek professional advice before they deny cobra coverage for employee misconduct.
- The employer MUST notify CBIZ COBRA within 30 days of receiving notice of a qualifying event.
- Within 15 days after receiving a qualifying event notice, CBIZ MUST notify each qualified beneficiary of his or her rights under COBRA.
- Cobraelection is not automatic. A qualified beneficiary must affirmatively elect within the election period (60 days) to continue their coverage from the later of:
- The date group health plan coverage is lost:
- The date the plan administrator provides the COBRA election notice
- Ex: termination date is 9-2-03 the loss of coverage is 10-1-03, we mail the notification on 10-5-03, the participant has until the 4th of December to say yes or no to cobra, and they have an additional 45 days to make their first payment.
NOTE: Each qualified beneficiary has an independent right to elect COBRA. This means, for example, that if group health plan coverage for a covered employees spouse and child terminated due to the covered employee’s terminating employment, the spouse and child each have a right to elect COBRA continuation coverage, even if they covered employee elects not to do so.
- The cobra premium for a month’s coverage cannot be more than 102% of the “applicable premium”. There is an exception for coverage for a disabled qualified beneficiary during the disability extension (11 months). It is limited to 150% of the applicable premium. CBIZ does not take the 2% fee from our clients. It is up to the employer to choose to reduce the percentage from 150% for someone who is disabled to either 102% or the employer can choose to not charge any amount above the premium for all participants.
…COBRA information at the click of a button…
To provide our clients with enhanced web capabilities, CBIZ COBRA is currently testing several software products which will consistently offer the following enhancements to our current services;
Employer Services Access
- Add newly participating employees (DOL initial notice generation)
- Add Qualifying events (PQB event notification)
- Change personal information for participants
- Participants can access their information by logging in
- Participants can view their status
- Participants can view letters sent to them
- Find out the time the participant has remaining to send in Enrollment Forms or Premium Payments
- Find out the amounts of premium the Participants owe
- Pay online via one-time ACH draft from checking account or savings account/credit or debit card or sign up for recurring ACH payments
- Convenience fee for any one-time payments including ACH or credit/debit card applies)
- Participants can print a copy of any correspondence sent to them via US Mail
- Summaries of enrollments, terminations, and premium payments
- Reports will download into a variety of formats (.xls, .pdf., etc)
- Notify insurance carrier(s) to add COBRA participants to the elected benefits
- Notify CBIZ of insurance rate changes at least 45 days before effective date. Remember that COBRA participants must be notified 30 days prior to the rate change effective date.
- Notify insurance carrier(s) of changes in benefits, including termination of coverage(s), for COBRA participants
- Provide COBRA participants with Open Enrollment Materials provided to active employees
- Notify CBIZ by completing the provided Qualifying Event Form whenever a qualifying event takes place. Qualifying events may include:
- Divorce / Separation
- Retirement / Medicare
- Reduction in hours
- Loss of coverage
- Leave of absence / FMLA
- Becoming an ineligible dependent
Initial Model notice (New Employees Right to Continue Coverage through COBRA)
- When an employee first enrolls in medical, dental, vision, EAP, or Health care flexible spending account, an initial model notice is sent to their home addressed to the family even if they have single coverage. This process satisfies the requirement to notify the employee and family.
- When a secondary event occurs, (changing from single to family coverage) CBIZ will send another notice addressed to the whole family.
Enrollment Form Notice:
- An COBRA enrollment package is sent when an employee experiences a qualifying event:
- Termination of a covered employee - (18 months)
- A reduction in a covered employees hours – (18 months)
- Death of an employee – (36 months)
- A divorce or legal separation from the covered employee – (36 months)
- Ceasing to be a dependent child under the terms of the plan – (36 months)
- The covered employee’s becoming entitled to Medicare – (36 months)
- Retirement – (18 months)
Confirmation of Enrollment with coupons
- Once the enrollment form and initial payment are received, a confirmation of enrollment letter with coupons is sent to the participant’s home.
- CBIZ will notify the employer of the enrollment via fax for re-instatement of coverage.
- Participants have 45 days to make their initial payment from the postmark date of the enrollment package
- Thereafter; the participants have a 30-day grace period each month to make payments and continue coverage.
Open Enrollment Notices
- Current and pending participant address labels are sent to the employer for inclusion with open enrollment packages being sent to active employees.
- A report including all active and pending participants will also be mailed to the employer.
- HIPPA Certificate – a certificate showing the amount of credible coverage( only if CBIZ administers HIPPA for the employer)
- Administrator Change and Coupons – a notice to inform COBRA participants their account has been taken over by CBIZ COBRA
- Premium change notice with coupons – a notice informing participants that their monthly premium has changed and new coupons are enclosed.
- Partial Payment – a notice informing the COBRA participant that there is a balance due which must be remitted in order to continue coverage.
- Termination – a notice informing the COBRA participant that coverage has terminated. A notice also is sent to the employer for remittance to the carrier.
- Medicare – a notice informing the COBRA participant that upon attaining age 65, the continuant is entitled to Medicare.
- Ineligibility of COBRA coverage – a notice informing the COBRA participant they are not eligible for coverage.
All notices referenced above are sent via US first class mail to both the enrollee and family (if any) to the last known address. (Proof of mailing certified through the CBIZ Distribution Center)
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