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Posted February 25, 2021

Billing for LOA, furloughed employees

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Administering employee benefits for your active population can be a big lift if you’re doing it on your own. And providing benefits to retirees or those on a leave of absence or are furloughed presents additional challenges since these employees aren’t receiving their regularly issued paychecks to deduct their premiums from. 

Automated solutions for billing these groups are even more important because many organizations continue remote work. Additionally, some employees choose to take a leave of absence due to family obligations or to reduce their risk of contracting the coronavirus. Here are four reasons you might need a direct bill solution. 

Employees easily keep up with premiums

In addition to their employer-sponsored health insurance, your employees may have a variety of other benefits, such as medical, dental, and vision, that they pay premiums toward. However, when they’re no longer receiving a paycheck, they may be left with having to pay those premiums in one lump sum or through catch-up contributions upon returning to work. And the size of that lump sum could be significant, depending on how long the employee has been on leave or furloughed. 

An administrator can offer you an automated direct billing solution to collect these premiums from employees while they’re out and remit them back to you. This includes an online account and/or mobile app for employees to easily submit payments. 

You easily keep up with premiums

The COVID-19 pandemic created new challenges for employers collecting premiums from employees. The challenge: What happens if premiums are submitted to an empty office? With so many employers adopting work-from-home offices during the pandemic, there might not be anyone in your office to collect these premiums in an expedient way. 

Administrators collect these premiums through a variety of payment options. Plus, if one of your employees does fall behind on payments, your administrator can act quickly on your behalf, reducing any liability or risk for all parties involved.

Robust reporting and record-keeping

Collecting premiums from retirees or your employees on leave of absence or furlough is only part of your responsibility. There’s also the paperwork that comes with billing these employees on your own, tracking such things as:

  • Which benefits each employee has.
  • Who has paid and who hasn’t. 
  • What is the best way to contact the employees to collect payment.

An administrator can provide you with an online account that puts all of this information and tracking just a click away. Our clients access LEAP, which is an all-encompassing platform for any benefits and COBRA plan offerings. 

Knowledgeable and experienced service

Generally, employees who are on a leave of absence or are furloughed do not have direct access to you in the same way that your active employee population does. And the types of questions they may have about their benefits and billing might be quite different. By outsourcing your direct bill, you and your employees gain access to that administrator’s customer service team. We have experts who are experienced in direct bill and flexible ways to contact us

Please note: There is no universal answer on whether COBRA should be offered to furloughed employees instead of direct bill. We cannot advise which is appropriate for an employer’s plan or situation. 

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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.

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