Asks the Experts: How Difficult Will COBRA Compliance Be?

Contact: Megan Maguire Kelly
Schubert Communications
(610) 269-2100 x225
mkelly [at] schubert.com

 

Ask the Experts: How Difficult Will COBRA Compliance Be?

Answer: Compliance, even under the new requirements, can be relatively simple - as long as you take the right steps

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King of Prussia, Pa. - March 10, 2009 - In the wake of the new COBRA regulations set forth by the American Recovery and Reinvestment Act of 2009, employers are bracing themselves for an avalanche of compliance-related processes and paperwork. Tight timelines, already compounded by lean HR staffs and other bandwidth concerns, are causing besieged employers to ask: how difficult is this going to be?

The answer, according to Frank Dallago, Trion's Director of Shared Services, varies depending on the systems that employers already have in place. The good news, though, is that employers who work with a benefits partner are ahead of the game.

“Once the initial concern about the new regulations settles, companies who have relationships with COBRA administrators will find that their partners are absorbing 99.5 percent of the new processes required to stay compliant,” said Dallago. "We’re rebuilding our processes and procedures to ensure compliance. Employers' responsibilities will be minimal and the transition should be painless.”

Below, Dallago responds to some of employers’ most pressing concerns:

 

• Given the time frame, how can HR departments identify all employees involuntarily terminated with a qualifying event from September 1, 2008 through the current date?

Benefits consulting and administration partners like Trion will provide their clients with online access to all employees who had a qualifying event date on or after September 1, 2008. This access date will be tied to the availability of the model notice which is scheduled to be released by March 19, 2009.

 

• Not all employers have tracked the reason for employee termination, and their internal systems may not currently accommodate the recording of that information.  How will these employers establish an identification method for involuntary terminations moving forward?

Because the methods of data transmission vary so greatly from company to company, benefits consulting and administration partners will modify their systems and processes according to each client’s individual needs.

 

• The Department of Labor (DOL) will draft a new COBRA model notice that contains the information necessary to comply with the new notification requirements. How can employers get a jump-start on this process ahead of the expected May 19th release date?

While it’s possible to create and issue qualifying event notices based on the initial legislation, we advise employers to wait for the official notice from the DOL. This will ensure that all necessary information is included in the notice in an approved format, preventing costly revisions.

 

• Once active qualified beneficiaries have been identified as premium subsidy eligible, they need to be issued new payment coupons that clearly indicate the new employee premium obligation. Are employers responsible for this in-house?

No. Most benefits consulting and administration partners will issue new, compliant payment coupons no later than April 18, 2009.

 

• In order for employers to be reimbursed for premium subsidies, monthly COBRA activity reporting activity must be enhanced to capture and report on the premium subsidy. Will this burden fall entirely on employers?

No. Companies like Trion are preparing enhancements to the reporting capabilities of their COBRA platforms. We will clarify and program reporting requirements in advance of any premium subsidy payments.  Employers will only be responsible for the actual submission of the report to the IRS.

 

Trion’s goal is to remove the administrative burden from the new COBRA requirements.  For the latest information about the new COBRA requirements set forth by the American Recovery and Reinvestment Act of 2009, visit www.trion.com/cobra. If you would like to communicate directly with a live COBRA counselor, call 610-945-1173 or e-mail cobra.alerts@trion.com. All messages will be returned by the next business day.

 

About Trion

Headquartered in King of Prussia, Pa., Trion develops innovative solutions for local, regional and Fortune 1000 companies. With more than 300 associates nationally, Trion specializes in Health and Welfare plans, large-employer Disability and Life programs, Benefits Administration, Integrated Health and Productivity Management, and Voluntary Benefits.

 

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