Best Practices for Employers When Handling COBRA

Many small to mid-size employers may be uncertain when COBRA needs to be offered and who should be offered COBRA when a qualifying event occurs. This can create anxiety for the human resource professionals in charge of handling COBRA for their organizations, and for good reason - COBRA can bite when mistakes are made.

To help employers, we have compiled a list of best practices for employers to help prevent COBRA errors. If you need additional assistance or help with a specific COBRA issue, please contact your dedicated account manager.

#1. Know when COBRA should be offered
In general, two conditions must be satisfied to trigger a COBRA notice requirement:

1. a loss of coverage for a person enrolled in a one of your organization’s group plans that are subject to COBRA.


2. the loss of coverage must be caused by a COBRA qualifying event.

#2. Offer COBRA to the right person(s) for each event type
It can be challenging sometimes for human resources to know if a coverage change is due to a COBRA qualifying event or another reason. When coverage changes are requested, it’s important for HR to know the reason for the change request so as not to miss out on indicators of possible COBRA qualifying events.

Qualifying events for employees include:

• Voluntary or Involuntary termination of a covered employee’s employment (other than for gross misconduct);


• Reduction in the covered employee’s hours of employment;

Additional qualifying events for spouses and dependent children include those above, as well as:

• Covered employee becomes entitled to Medicare;


• Death of the covered employee;


• Divorce or legal separation from the covered employee; or

One additional qualifying event specific to dependent children only:

• Dependent child of the covered employee ceases to be a dependent under the terms of the plan;

Flores has a complimentary COBRA Qualifying Event Guide chart available to employers that can be downloaded to keep as an easy reference.

#3. Review reports from your COBRA TPA regularly
A good COBRA TPA will keep you informed on COBRA activity frequently and make information like when notices have been sent or payments are received accessible. Flores provides weekly COBRA recap reports for COBRA clients that provide details on upcoming notices that will be printed, notices that have been sent, election forms received and even payment history. Regularly reviewing these reports can help ensure qualifying events are being reported as needed, which is particularly helpful if your organization uses electronic file feeds to report COBRA events. Additionally, regular review is also important to ensure COBRA General Rights Notices have been provided to new hires, those who have newly elected benefits, and any newly enrolled spouse.

#4. Reconcile carrier invoices monthly
You assumed a COBRA continuant’s health coverage was terminated with the carrier when they stopped making payments, but three months later you realize it never happened and the carrier will not retroactively terminate back to the non-payment date. Has this scenario ever happened to you? It can be a nightmare for HR, accounting and even your broker partner to get straightened out. To avoid scenarios like this, we recommend you reconcile your carrier invoices monthly against COBRA remittance reports to make sure you are being properly billed by your carrier for COBRA continuant activity and that any automated file feeds you may use to update carriers are working as intended. If you use Flores to administer COBRA, you can find excel remittance reports detailed by plan type in the Reports section of the Flores247 Employer Web Portal. We maintain a full history of reports, so if you do need to reconcile a previous month, the reports will be available to you when you need them.

COBRA can be a challenging area for employers and does require a proactive approach to manage effectively. If you are interested in learning more about COBRA solutions from Flores, please contact your dedicated account manager or a member of our Business Development team at 800.532.3327.