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COBRA Administration

Employer Support Services has been administering COBRA since its inception in 1996. Our knowledgeable staff includes professionals with extensive knowledge and experience in COBRA administration. Additionally, our staff undergoes extensive training each year to stay abreast of COBRA regulations.

What is COBRA?

COBRA or the Consolidated Omnibus Budget Reconciliation Act of 1985 is the law requiring employers with 20 or more employees on a typical business day in the prior year to offer to extend health benefits to employees and/or dependents experiencing a loss in coverage due to a qualifying event. Extensions must be provided for 18 months up to 36 months depending on the type of qualifying event.

What are Qualifying Events?

There are seven qualifying events under COBRA, which are:

  • Termination of employment
  • Reduction of hours causing a loss of coverage
  • Divorce or separation
  • Death of employee
  • Medicare entitlement
  • Change in dependent status
  • Employer bankruptcy

What benefits are subject to COBRA?

  • Health Insurance
  • Dental Insurance
  • Vision Insurance
  • Flexible Spending Accounts under a cafeteria planHealth Reimbursement Arrangements (HRA)

What are the penalties for non-compliance?

Employers who fail to fulfill their obligations under the COBRA law may be subject to IRS and DOL penalties. IRS penalties could be as much as $115 per day while the DOL could also charge penalties of up to $110 per day. This is in addition to expenses related to lost premiums, additional claims paid, or expenses relating to lawsuits.

ESS Services

ESS performs the following COBRA administration functions:

  • Provides a Client COBRA Manual
  • Sends Initial Notices
  • Sends COBRA Qualifying Event Notices
  • Tracks time periods for notices and election periods
  • Sends notices for, cancellation of coverage due to non-payment, end of eligibility, etc.
  • Provides employer notifications of elections and payments
  • Maintains documentation of notices sent
  • Maintains training documentation

If you have questions regarding your COBRA compliance obligations give us a call and we can show you how easy and economical it is to outsource your COBRA administration.