Managing COBRA shouldn’t be rocket science, but there is a science to it that employers and HR managers need to be aware of.
Most of it’s covered in following five basic rules of COBRA admininstration, as explained by the law firm of Ogletree Deakins:
1. Watch the hours. If access to your health plan is determined by the number of hours a week employees works — for instance, they have to work a minimum of 30 hours to get coverage — then you’ll have to offer COBRA to any employee whose hours dip below that number and who loses coverage as a result.
2. Know your state laws. Some states have quirky rules that are add-ons to the federal COBRA regs. Check your state laws to make sure you’re in compliance with them.
3. Don’t forget the spouse. You probably know you’re obligated to send a notice of a “qualifying event” to the employee’s residence so that a spouse is kept in the loop. But what if the spouse doesn’t live at the same address? Have employees update spouses’ contact info, and make it a practice to check that info when COBRA notification comes into play.
4. Coordinate with FMLA. In most instances when an employees takes leave under the Family and Medical Leave Act, COBRA isn’t an issue, since health coverage normally continues while the employee is on leave. But you’ll want to watch for two FMLA related situations: (a) An employee’s FMLA leave expires, and the employee doesn’t return to work or (b) during FMLA leave, an employee notifies you he’s not returning work. In either case, COBRA — and your obligation — may kick in.
5. Be specific about domestic partners. If your plan covers employees’ nonspouse partners, your plan description needs to explain how those partners are treated when there’s a COBRA qualifying event. For instance, what happens when there’s a breakup that’s not a legal divorce? If you’re not specific in your summary plan description or other documents, the law generally tilts in favor of the partner.
