If you are interested in more information about enrolling in a qualified transportation account, your account manager or broker are available to assist.
COBRA Notice, Election, and Premium Payment Timelines
A critical part of COBRA administration is adhering to the federally regulated timelines. From the issuing of the required notices to the collection of premium payments, there are several federally regulated timelines that must be met to maintain COBRA compliance. These notice, election, and premium payment timelines, detailed in the U.S. Department of Labor’s Employer’s Guide to Health Benefits under COBRA, have been summarized below for your convenience:
Notice timelines
- COBRA general notice
COBRA requires employers to provide each employee and each spouse who becomes covered under the group plan a general notice describing COBRA rights. This notice explains COBRA and the steps necessary for notifying the plan administrator of a qualifying event. The general notice must be provided within the first 90 days of coverage.
- COBRA qualifying event notices
Before continuation coverage can be offered, a qualifying event must occur, and notification of the event must be provided within the COBRA-regulated time frame.
You, as the employer, are responsible for providing notification of all qualifying events to UPMC Benefit Management Services (as your acting COBRA administrator) within 30 days of the event. These events include:
- Termination or reduction in hours of employment of the covered employee.
- Death of the covered employee.
- A covered employee becoming entitled to Medicare.
- Bankruptcy of a private-sector employer.
- Military leave.
- Divorce/Legal separation.*
- A child’s loss of dependent status under the plan.*
*For qualifying events of divorce/legal separation and loss of dependent child status, it is the employee’s responsibility to provide notice to the employer of the event within 60 days, counted from the later of (1) the date on which the qualifying event occurs or (2) the date in which the employee loses coverage under the plan as a result of the qualifying event.
- COBRA election notice
Once we receive your notice of a qualifying event, we are then responsible for providing the COBRA Election Notice to the qualified beneficiaries. This letter explains COBRA, presents the plan(s) being offered, and indicates the associated monthly premium(s) and the election/enrollment procedures. We are required to provide this notice to the qualified beneficiaries within 14 days after receiving your notice of a qualifying event.
- COBRA Notice of Unavailability of Continuation Coverage
On occasion, you the employer may have the right to deny a request for continuation coverage. For example, if a spouse contacts you 90 days after his or her divorce with a request to continue coverage, you have the right to deny this request, because the person did not meet the 60-day deadline established by COBRA regulations for providing notification. In such a case, the Department of Labor (DOL) requires the plan administrator to provide a notice stating that the request for continuation coverage was denied and the reason for the denial. This notice must be provided within 14 days after the request is received by the employer.
- COBRA Notice of Early Termination of Continuation Coverage
Continuation coverage must generally be made available for a maximum period (18, 29, or 36 months); however, the group health plan may terminate continuation coverage earlier for any of the following reasons:
- Premiums are not paid in full on a timely basis.
- The employer ceases to maintain any group health plan.
- A qualified beneficiary begins coverage under another group health plan after electing continuation coverage.
- A qualified beneficiary becomes entitled to Medicare after electing continuation coverage.
- A qualified beneficiary engages in conduct that would justify the plan in terminating coverage of a similarly situated participant or beneficiary not receiving continuation coverage (such as fraud).
If coverage continuation is terminated early, a notice of early termination must be provided to the qualified beneficiary as soon as practical after the decision to terminate is made. This notice must describe the date coverage will terminate, the reason for termination, and any rights the qualified beneficiary may have under the plan or applicable law to elect alternative coverage.
Election Timelines
When a qualified beneficiary is offered COBRA, he must be given an election period of at least 60 days to choose whether to elect continuation coverage. This 60-day period starts from the later of (1) the date the qualified beneficiary (QB) is issued the election notice or (2) the date that the QB would lose coverage. If the QB waives continuation coverage during the election period, he must be permitted to revoke his waiver of coverage and to elect continuation coverage as long as the QB does so within the initial 60-day election period.
Premium Payment Timelines
When a qualified beneficiary elects continuation coverage, he or she cannot be required to send in any payment with his or her election form. He or she can, however, be required to make an initial premium payment within 45 days after the date of the COBRA election (which is the date the election form was mailed or elections were submitted electronically via the online member portal).
For successive periods of coverage, the premium due date is the first of the month of coverage (for example, October premium will have a due date of October 1). However, COBRA requires the plan give QBs a 30-day grace period for payment of any premium.
If the amount of a payment made is incorrect but is not significantly less than the amount due, the plan is required to notify the QB of the deficiency and grant a reasonable period (30 days) to pay the difference.
Failure to make payment in full before the end of a grace period can cause a QB to lose all COBRA rights.
Every aspect of our COBRA administration is designed with compliance in mind. Our materials, systems, and staff work diligently to make sure you and your customers are compliant with every provision of COBRA law. You may contact your dedicated analyst at any time with any questions.
The above information is for informational purposes only and is not legal or tax advice. UPMC Health Plan and UPMC Benefit Management Services do not provide legal or tax advice. For legal or tax advice, please contact your attorney or tax adviser.
