COBRA Administration
At LGC HealthTrust, we proactively assist member groups with handling Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) administration. To help navigate the complexities of COBRA administration, LGC HealthTrust offers value-added services to our member groups at no cost.
What is COBRA?
As amended, COBRA requires most employers sponsoring group medical and/or dental plans to offer covered employees and their family members (qualified beneficiaries) the opportunity for a temporary extension of medical and/or dental coverage (continuation coverage) through the group at their own expense in certain instances (qualifying events) where coverage would otherwise end.
A qualifying event is any one of the following that results in a loss of coverage:
- Termination of the covered employee’s employment
- Reduction in the covered employee’s work hours
- Divorce or legal separation
- Death of the covered employee
- Covered employee becomes entitled to Medicare
- Dependent child ceases to be eligible as a dependent under the terms of the plan
Notice Requirements
COBRA rules specify certain notice requirements that must be provided to qualified beneficiaries by employers or plan administrators. Requirements include the following:
- Initial COBRA Notice
- Notice of a Qualifying Event
- Notice of Right to Elect COBRA
- Unavailability Notice
- Termination Notice
Value-Added Services
At LGC HealthTrust, we assist member groups with the following services.
COBRA Notification
Specifically, LGC HealthTrust provides the following:
- Initial COBRA Notice – We send this notice to all new enrollees and their spouses (if married) upon initial enrollment under the group’s health plan, generally within one week of enrollment processing.
- Notice of Right to Elect COBRA – We send this notice to qualified beneficiaries regarding their COBRA continuation coverage rights when a qualifying event occurs. It specifies the names of eligible qualified beneficiaries, the event that occurred, monthly cost of COBRA coverage, COBRA payments due dates, and more. It also includes a COBRA election form for the qualified beneficiary to use to elect COBRA. It is generally sent no later than 14 days after the group has notified LGC HealthTrust of the qualifying event.
- Termination Notice – This notice to COBRA beneficiaries advises that their COBRA continuation coverage is ending either because the maximum COBRA coverage period is expiring or COBRA coverage is ending early for non-payment of premium or voluntary cancellation.
Billing Services
As an added convenience, member groups may opt to have LGC HealthTrust provide individual billing administration for their COBRA-qualified beneficiaries.
As part of our COBRA administration service, LGC HealthTrust:
- Directly bills COBRA-qualified beneficiaries who have elected COBRA continuation coverage.
- Collects contribution payments from COBRA beneficiaries, relieving member groups of the administrative burden of doing so.
- Generates detailed monthly reports for member groups listing COBRA beneficiaries who have been billed by LGC HealthTrust, along with their medical and/or dental benefit plan, coverage type and billed amounts.
Although COBRA beneficiaries are still considered part of your member group, LGC HealthTrust handles all related COBRA paperwork—from COBRA election through ongoing maintenance to cancellation and, if applicable, reinstatement. This eliminates the responsibilities of tracking COBRA payment grace periods and notifying LGC HealthTrust whenever COBRA payments are late.
Billing Guidelines
Following are important guidelines regarding LGC HealthTrust’s individual billing administration for COBRA-qualified beneficiaries:
- This service applies to all LGC HealthTrust-covered medical and/or dental COBRA beneficiaries.
- As allowed by COBRA, an administrative fee of 2 percent will be charged to each COBRA-qualified beneficiary to cover the cost of this service. There is no additional cost to the member group.
- COBRA billing must apply to all LGC HealthTrust-covered members within a member group.
- In addition to billing and collection services, LGC HealthTrust will manage all enrollment and membership changes directly with COBRA-qualified beneficiaries, leaving you more time for other priorities.
- LGC HealthTrust COBRA administration will follow COBRA guidelines regarding coverage payment. COBRA coverage will suspend for any invoice not paid in full by the first day of the coverage period. If payment is not received within the 30-day grace period, COBRA coverage will be cancelled with no reinstatement rights, as allowed by COBRA.