Do the health benefits defined by COBRA cost the employer anything? The company I work for just sent out a notice that it does not meet the federal requirements for COBRA coverage. I am fairly certain that they have more than 20 employees. Are there any other regulations for employer participation other than having at least 20 employees.
Edited thread title to clarify subject.
Colibri
General Questions Moderator
I used to work for a large benefits outsourcing consulting company that represents lots of very large companies. The health benefits themselves don’t generally cost the company anything under COBRA because the employee has to pay for it along with any government programs that may be in effect to help offset the premiums. However, the employer is responsible for COBRA administration even if they choose to pay to outsource it and that isn’t cheap or easy. The rules and potential scenarios under COBRA are very complicated and usually require experts in COBRA law to be involved. One of my specialties was COBRA systems work and the billing rate for that type of work was in the hundreds of dollars an hour per specialist and it took many of us to develop it and make it work on a weekly basis. I am not sure how smaller companies handle it but it isn’t free or simple by any stretch.
I’ve handled COBRA at different hotels I’ve worked for and it’s really simple. I don’t know why the above poster says it’s so difficult.
It’s just a continutation of what is already there, so it shouldn’t be much problem
For details see Dept of Labor’s Guide to COBRA for employers [Warning: PDF]
COBRA health benefits mainly allow you to continue your company health insurance policy, but they in turn can make you pay the full amount. For example, if you and your company split the cost of health insurance 2/3 to 1/3, and you normally pay $500 per month, under COBRA, you’ll pay $1,500 per month.
COBRA administration is quite complex. For example, you have three months to decide to take COBRA, but if you decide to take it, it is retroactive from the day you got laid off. COBRA coverage lasts for 18 month. Most companies outsource their COBRA coverage because of the complexities involved in the law.
Your best bet is to contact someone at your state government and ask. If your state has a Department of Labor, that might be a good place to start.
You were probably just passing it off to another party for outsourcing or had a group internally that was experts on it. That isn’t hard but, as qazwart said, the administration and rules are difficult. Believe me, I worked on this stuff for famous companies for four years and they ponied bucks up big for COBRA administration. It isn’t just a matter of switching over a partial bill to a full one. There is a whole industry built around administering it.