Are you COBRA Compliant in the Age of Health Care Reform?

Are you COBRA Compliant in the Age of Health Care Reform?

 

 

Commonly Asked Questions and Answers to keep you COBRA compliant

Q: With the inception of the Patient Protection and Affordable Care Act, are employers still required to administer COBRA?

A: YES.  COBRA was not mentioned in any of the PPACA legislation.  Continuation of coverage will probably become a burden for both employers and carriers with the changes from health care reform.  As more options become available to individual consumers, employer and carriers will need to make sure they are meeting their requirements for explanation and choice.

Q:  When does the 65% COBRA subsidy under the American Recovery and Reinvestment act end?

A:  The subsidy provided under the ARRA ended as of August 2011.  The last COBRA participants to be eligible would have been terminated from employment prior to May 1, 2012 and have eligibility for 15 months of the subsidy.

Q: How long is an employer required to keep ARRA-subsidized participant records?

A:  Employers are required under COBRA to keep records for 6 year.  It is recommended that employer keep documentation of the participants COBRA continuation, related 941 tax reports and related documents or transaction history for the required 6 years or longer.

Q: With the inception of PPACA, will employees that are terminated still have to be offered COBRA election? 

A:  No clear direction as to COBRA election offerings has been provided yet.  However, the current law requires that in most states, employers with more than 20 employees are subject to federal COBRA and mini-COBRA is group with less than 20 employees.  The guidelines are:

-          Those who experience a qualifying event (see dol.gov for details) are entitled to be offered continuation of coverage through the employer.

-          They need to be afforded the opportunity to participate for a period of time

-          If at the time of the qualifying event the terminated employee is in the middle of a deductible or treatment plan, continuation may be a beneficial option for them

Q: What are the most common employer mistakes when it comes to COBRA?

A:            - Failing to give the appropriate notices to plan participants

                - Failing to offer enrollment to COBRA eligible, terminated employees

                - Providing a greater amount of coverage or allowing the terminated employee to remain covered for too long.

                - Failing to properly send election notices to those experiencing a qualified event

                - Failing to document that the election notice was sent

                - Failing to collect premiums from COBRA participants

                - Continuing to pay the premiums for employees who are no longer covered under the plan

Looking for additional help with your company’s COBRA administration? Contact SHN at info@solidarityhealth.org or call us at 216.831.1220.

 

Content adapted from Health Insurance Underwritter, December 2011. “Taming COBRA” Robert Meyers.

 

Lower Winter Absenteeism: Keep Employees Healthy with a Flu Shot!

Lower Winter Absenteeism: Keep Employees Healthy with a Flu Shot!

 

By Alexandra Granakis

With flu season quickly approaching, now is the time for employers to begin planning.  In America, as much as 20% of the population will contract the flu.  This can mean higher healthcare costs and higher rates of absenteeism.  To fight back against the flu, employers can take many steps to help their employees and reduce the impact the flu may have on their business.  They provide education materials to their employees, including the importance of hand-washing, ensure that they provide health coverage to assist their employees and take steps to stop the spread within the workplace.   One of the most beneficial steps employers can take is to adopt on-site flu vaccination clinics, or provide vouchers to employees to receive a vaccination. 

Educating employees is one important step that employers can take to reduce the incidents of flu in their workplace.  Taking the steps to provide employees with educations posters and brochures about vaccination can do a great deal to help reduce the spread of the virus.  Things for employers to include are where, when and why to get the flu vaccine. 

Choosing a benefit plan that provides dual coverage of vaccinations through both pharmacy and medical is one way to ensure that employees are able to receive their vaccination with no out-of-pocket expense.  Expanding benefit coverage for the vaccinations increases the number of employees that choose to get vaccinated, which decreases the incidents of the virus within the workplace and also decreases the levels of absenteeism.  Some studies have reported that employers can see up to 25% increase in employees choosing to get vaccinated.  More vaccinated employees can result in benefits for the employer, both financially and in terms of performance.   

Other steps employers can take are ensuring that there is proper hygiene.  The flu is easily spread from person to person and from contaminated surfaces.   Tell ill employees to remain home to decrease the chance of spreading.  Provide ample supply of hand sanitizer and tissues throughout the office to reduce the spread.  Encourage all staff members to keep their workspaces disinfected at least once a week. 

A great way to increase the number of employees who choose to get vaccinated is to host an onsite flu vaccination clinic.  This option is convenient and provides ready access for a large number of employees.  The programs are generally free to the employee and can be offered at a discounted cost to spouses and dependents.  Studies have shown that employers can save as much as $80 per employee by providing on-site flu clinics.

Setting up an on-site clinic is easy!

 

If you would like more information on how you can establish an on-site flu vaccination clinic for your employees, please contact SHN at info@solidarityhealth.org.  Or call us at 216.831.1220.

 

Information adapted from EHConnect, Summer 2012. “Plan Now to Keep Employees Healthy This Flu Season” Charity Rausch, PharmD.

What does the Supreme Court’s decision to uphold the PPACA mean for employers?

What does the Supreme Court’s decision to uphold the PPACA mean for employers?

Health Care Reform

July 26, 2012

In a surprising decision, the US Supreme Court ruled in favor of the hotly debated Patient Protection and Affordable Care Act, which was enacted in 2010.  At the time of the vote, Congress was divided strongly along partisan political lines.  In addition, 26 states contested the new law as unconstitutional as did a number of employer representatives.  On June 28^th the Supreme Court released its majority opinion in favor of upholding the PPACA.   One of the key rulings in their extensive decision was a 5-4 vote on the “individual mandate,” which requires that individuals be covered by health insurance or face a penalty, upholding that it is constitutional, based on the Congress’ general taxing power, not the Commerce Clause of the US Constitution.  The majority ruled that the “penalty” was in effect a tax and that the mandate provision was able to be upheld and sustained under Congress’ taxing power. 

The Supreme Court’s decision will result in a number of changes in many arenas, including the continuation and acceleration of health plans to begin and continue their implementation of significant plan adjustments.  They will need to ensure that services are delivered and adjust the allocation of costs contingent to PPACA.  The current system of employer sponsored health plans will expand to one of the largest avenues for Americans to obtain health coverage.  The decision reiterates that employers will have to significantly expand their coverage offerings to employees, with greater obligations and costs as required by the PPACA.

Now what?

Employers need to carefully monitor the staggered effective dates required by the different provisions of the PPACA.  There are a number of steps employers can take to prepare themselves for the changes that are approaching.

Employers need to know the law affects both large and small employers.  Employers that have greater than 50 full-time employees will now be required to provide insurance coverage for their employees or face a tax penalty.  Small employers, those with less than 25 employees and who’s annual wages are below $50,000, are typically not able to afford to offer their employees’ health coverage.  Under PPACA provisions, small businesses will now be eligible for a small business tax credit to help offset the cost of offering health insurance to employees.  The tax credit is currently up to 35% of the insurance premium cost and will offset the cost of a portion of the premium.  Beginning in 2014, this percentage will increase to 50%.

Employers will need to ensure that the policy they choose meets the minimum requirements under PPACA.   It is important that companies review the minimum coverage requirements for their business size prior to choosing a plan.  The definitions of full-time employee are different for healthcare than may be defined in a workplace.  There are specific requirements and provisions for employers based on the number of employees. 

Employers will need to carefully assess the financial ramifications of the PPACA.   Employers will need to examine whether or not it is more beneficial for them to provide health insurance coverage options to their employees or face the tax penalty that will be assessed to them.  Employers will also need to consider what dropping coverage will do to employee morale and on workforce recruitment and retention.  Employers will need to recognize that it is not a cut and dry decision on whether or not to follow the provisions or to pay the penalty. 

Employers must carefully review the new requirements and determine whether their current benefit plan is acceptable or if changes need to be made.  There are strict limitations on how much of the cost can be shifted onto employee and employers will need to decide whether the monetary increase to provide health benefits can be treated as additional overhead or whether cuts in other benefits must be made.

Employers will need to have a clear understanding of the law’s provisions.   The law contains very detailed provisions as to what must be covered and what employers must provide.  Employers will need to ensure that they understand and follow these provisions. 

Employers will need to monitor changes and keep up with current developments.   There will be constant releases of new details and regulations.  These must be monitored and followed. Employers will also need to keep themselves educated on the changes and developments within the insurance market and their new and revised services, offerings, and costs.

The Bottom Line

Although the Supreme Court has currently upheld the PPACA, the controversy around it continues to swirl.  There will most likely be future attempts to overturn the ruling and the outcome will be decided in Congress.  The upcoming November election will also play a role in the future of health care reform.  At this time, the future of the Act is not clear, and will not be until after the election.  The candidates hold very different views on health care and there may be drastic changes to come.  Employers must keep themselves current with the ever changing laws and regulations to ensure they are compliant.

Adapted from FEDERAL EMPLOYMENT LAW INSIDER. Vol. 9 No. 11 July 2012 – “What the Supreme Court’s upholding of the PPACA means for employers” J. Scott et. al.