Tzvia Feiertag, Member of the Firm in the Employee Benefits & Executive Compensation practice, in the firm’s Newark office, was quoted in HR Dive, in “Back to Basics: How to Comply with COBRA,” by Sheryl Estrada.
Following is an excerpt:
What is COBRA?
COBRA is a federal law that requires group health plans maintained by employers with 20 or more employees to temporarily continue health coverage for qualified beneficiaries when a qualifying event occurs, Tzvia Feiertag, member of the firm in the Employee Benefits/Executive Compensation practice at Epstein Becker & Green, P.C., told HR Dive. COBRA can be administered through an employer or an outside vendor, Feiertag said. However, compliance with the law is the responsibility of the employer, she added.
Qualified events under COBRA include terminations, for any reason other than “gross misconduct” per U.S. Department of Labor (DOL) guidance, and hour reductions which result in loss of health coverage. It can also include death of a covered employee, divorce or legal separation, Medicare entitlement and loss of dependent status. Although there isn’t a qualifying factor for furloughs, it’s possible that a furloughed employee can also have a COBRA right, Feiertag explained. If an employees’ hours are reduced, under that employer’s plan, they could be eligible, she said. “So, for that period of time they’re furloughed, they could continue to get coverage, if they were to elect COBRA,” Feiertag said.
Employers must provide an initial notice to beneficiaries (the employee, covered spouses, dependent children) explaining the right to elect COBRA to continue to receive health coverage, Feiertag said. The employer must then notify the health plan provider within 30 days of the event, “if the qualifying event is the covered employee’s termination or reduction of hours of employment, death, entitlement to Medicare or bankruptcy of a private-sector employer,” according to DOL. Within 14 days of receiving a notice of a qualifying event, the health insurance carrier must give the qualified beneficiaries an COBRA election notice.
Upon receiving the election notice, beneficiaries have 60 days to choose whether or not to elect continuation coverage, Feiertag said. Continuation of health coverage under COBRA must be the same as the coverage currently available under the plan. Based on the type of qualifying event, COBRA can provide either an 18-month or a 36-month period where an individual gets to continue their coverage, Feiertag said.
Notably, DOL issued a new model for a COBRA general notice and election notice May 1 to assist Medicare-eligible individuals. “I counsel employers to really work with a COBRA administrator,” Feiertag said. “There’s a lot of pitfalls in not meeting the deadline requirements. Working together with a COBRA administrator makes it easier for an employer to manage.”