3 ways COBRA compliance experience matters

COBRA compliance experience is crucial. How good of a handle do you have on COBRA’s many rules and regulations? 

It’s not easy fulfilling all COBRA compliance obligations and requirements. This was particularly true during the last two years, when the American Rescue Plan Act (ARPA) was signed into law to provide relief to Americans during the COVID-19 pandemic. The benefits of working with COBRA experts far outweigh the penalties and large amounts of administrative work COBRA compliance entails when you administer it yourself. 

Why is COBRA compliance important?

COBRA compliance is a two-pronged challenge for COBRA participants. They may already be stressed due to their COBRA-qualifying event, and uncertainty around their healthcare can be an added stressor. 

For employers, COBRA compliance matters. Violations can carry steep penalties, legislation can be frequently adjusted, and COBRA can be difficult to communicate since it involves your inactive employee population. COBRA compliance is multi-faceted; like any law there’s a possible misstep for every requirement. With decades of experience, we understand the compliance and business of COBRA. 

Avoid penalties

Employers put themselves at risk of potential penalties when they don’t hit federally mandated COBRA deadlines, which could include sending general rights notices and COBRA election notices within the required time window. There are other potential areas where inexperience can affect COBRA compliance, such as: 

• Not realizing a group health plan is subject to COBRA.
• Overlooking applicable state COBRA laws.
• Charging incorrect COBRA premiums. 

Legislation adjustments

Change has become all too normal for us since 2020. One of the most notable COBRA changes occurred when ARPA was signed into law. ARPA allowed workers who were involuntarily terminated or experienced a reduction in hours to continue their employer health insurance coverage under COBRA with a temporary 100 percent subsidy in 2021. The subsidies were effective through September 30, 2021.

When ARPA was signed into law, WEX put a plan in place to prepare consultants, our partners, and our clients with the tools and resources they needed, including: 

• A COBRA compliance webinar with HR.com. 
• Multiple blog posts to provide education on ARPA. 
• A podcast episode with a senior regulatory and public policy analyst at Benefit Comply answering questions.
• A landing page with answers to frequently asked questions. 
• A COBRA subsidy timeline graphic with important deadlines. 
• Frequent communications to our audiences with upcoming deadlines and new information.  

“(Regarding COBRA ARPA AEIs), WEX has taken that extra step where it’s all done in the system,” said Carrie Arnold of EPIC Brokers. “You’re not waiting for someone on the back end to get it done. It just feels cleaner and it feels faster.”

Comprehensive experience

COBRA is a complex topic that requires experience in keeping it simple when communicating to participants or qualified beneficiaries. Helpful tools such as a knowledgebase of help articles, an easy-to-use mobile app, and responsive customer service all help to support COBRA participants along their compliance journey. 

Experience also shows in the technology that supports communication. Automation is key to making sure communications are sent to qualified beneficiaries on time. Ideally, an HR representative simply needs to update the qualified beneficiary’s status in their system and, behind the scenes, nearly everything else is taken care of. 

Staying compliant with COBRA regulations is a must for all organizations. Check out our COBRA page to learn more about the COBRA experience with WEX.

The information in this blog post is for educational purposes only. It is not legal or tax advice. For legal or tax advice, you should consult your own counsel.