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Archive for the ‘COBRA for Employers’ Category

Filing a COBRA Insurance Claim

Posted on: September 13th, 2012 by Kristen Marie

Filing a claim for COBRA health insurance benefits can feel intimidating the first time you do it, but since it is just a continuation of the insurance plan you had, all you have to do is follow the same procedure as when you were employed. For most insurers this will include saving a receipt, filling out a written insurance claim form, and mailing the form and receipt into the insurance company. Reimbursements usually take 4-8 weeks for processing.

If you waited to sign up for COBRA insurance until the end of the sixty days window for enrollment and incurred medical expenses during that time, you can also submit reimbursements and claims to your COBRA administrator because COBRA is retroactive. Since COBRA is retroactive back to the date you lost coverage, everything is covered during that 60 days. Follow the procedure in the Plan Summary Guide from your insurer to submit a claim correctly.

If you want to make a claim against your employer for failing to send you an enrollment form or making another mistake with you COBRA coverage, you can contact the Department of Labor who oversees all issues with the COBRA law, or Consolidated Omnibus Budget Reconciliation Act.

COBRA Coverage and Gross Misconduct

Posted on: August 8th, 2012 by Kristen Marie

doctor filling out formA question that we hear often from visitors to the site is about exactly what qualifies as gross misconduct and would therefore disqualify them from being able to enroll in COBRA insurance. Employers in some cases will try to deny COBRA coverage to employees due to misconduct, but the law is very strict in terms of what actually qualifies as gross misconduct as opposed to simple misconduct.

Let’s start with the legal definition of gross misconduct: Acts of gross misconduct are intentional, wanton, willful, deliberate, reckless, or in deliberate indifference to an employer’s interest. Unfortunately this is still pretty broad. So let’s look a little but deeper. In most court cases, gross misconduct must also be objectionable and intentional. It can not be a mistake or negligence. This means that simple mistakes can not be categorized as gross misconduct.

Additionally, based on past cases we can also include the following items as gross misconduct that would make someone ineligible for COBRA insurance:

  • Disregard for the overall safety and security of others
  • Purposeful acts of hostility and violence
  • Any attempt to financially defraud a company
  • Serious insubordination
  • Dishonesty and misrepresentation

In addition, criminal acts are almost always considered gross misconduct under the law.  This would include violence, sexual misconduct or harassment, theft, embezzlement, and any other criminal charge that the company files against an employee.  Moreover, behavioral gross misconduct can qualify which may include sexual harassment and discrimination of any kind.

Finally to help solidify your understanding of gross misconduct, let’s look at some examples of things that wouldn’t be considered gross misconduct.

  • Poor performance
  • Minor errors in judgment or negligence
  • Being frequently late
  • Miscommunication
  • Frequent absences
  • Frequent mistakes

COBRA Non Compliance – Employers

Posted on: August 6th, 2012 by Kristen Marie

The IRS just came out with a report siting that over 90% of companies are non-compliant in terms of their COBRA insurance administration, and therefore are opening themselves up to the danger of serious fines, auditing, court cases, and penalties.  The main reason that so many companies are believed to be non-compliant is that companies believe their health insurance provider is handling their COBRA administration and they believe the health insurance company is the liable party.  However, even if the health insurance company handles COBRA, at the end of the day the employer is 100% liable for COBRA and it being administered according to the law.

In addition, COBRA non compliance can have serious consequences for employers.  These include

  • Losing expensive court cases:  Over 75% of companies lose COBRA court cases and end up liable, responsible, and in most cases owing major damages.
  • Expensive Fines:  $100 IRS penalty per beneficiary per day (up to $200) plus a $110 ERISA penalty per beneficiary per day fine for non compliance.  That means the company will be fined over $100,000 for just six months of non compliance for 1 family of four.  Imagine if there were more than one and how quickly these fines can add up.  They are enough to bankrupt companies in times of major layoffs.

So what do you need to be in compliance for COBRA insurance?  Here are some of the most important documents and evidence you need, but the list is not exhaustive.

  •  Evidence that every person on the group health insurance plan received an initial notice about COBRA when they enrolled
  • COBRA insurance handbook
  • Standard COBRA form letters for employers and family members
  • Copies and records of COBRA notices
  • Copies and records of any COBRA events

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