COBRA Coverage and Responsibilities After Employee Termination
Employers and employees often have questions about handling COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage after an employee's termination within the context of an Individual Coverage Health Reimbursement Arrangement (ICHRA) administered by Take Command. This article covers all aspects of COBRA responsibilities and provides clarity on several key areas of concern.
Introduction to COBRA and ICHRA
COBRA allows employees and their families to retain health insurance coverage after employment termination, typically requiring continued premium payments. With ICHRA, COBRA responsibilities differ slightly from traditional group health insurance plans, and the administration of these activities falls outside Take Command's purview.
Employer Responsibilities
Employers play a central role in managing COBRA coverage for former employees. Here are the detailed responsibilities:
Providing COBRA Notices: The employer must issue COBRA notices to terminated employees as required by law. Take Command does not send out these notices or assist in this process.
Administering COBRA Payments: Former employees typically pay their COBRA premiums directly to the employer or a third-party COBRA administrator, based on the employer's internal processes. These payments are handled outside the Take Command platform.
Handling Contributions and ICHRA Benefits: Once an employee is terminated, employers are not required to continue ICHRA contributions on their behalf. Unused funds already contributed to the employee's ICHRA can still be used for qualified expenses. Employers must also communicate the cessation of ICHRA benefits as part of their notice obligations.
Reimbursements After COBRA Election: If a former employee elects COBRA coverage after termination, the employer must manually handle any reimbursements in compliance with COBRA rules outside the Take Command portal.
Role of Take Command
Take Command's platform simplifies aspects of ICHRA administration but does not extend its services to COBRA management. Specifically:
Take Command does not issue COBRA notices, collect COBRA premiums, or handle reimbursements post-termination. All COBRA-related tasks are the employer's or a third-party administrator's responsibilities.
Interactions with Insurance Carriers
In some cases, especially where no third-party COBRA administrator is present, employees and employers must coordinate directly with the insurance carrier. Here’s what to do:
Confirming COBRA Eligibility: Contact the insurance carrier that originally issued the employee’s health plan to confirm COBRA eligibility and understand the process for enrollment.
Enrollment Steps and Coverage Options: The carrier provides guidance on enrollment deadlines and available coverage under COBRA when no intermediary is involved.
When to Contact the Carrier: If the plan was purchased via a Marketplace or directly from the carrier, reach out to the appropriate carrier rather than the company’s insurance broker, as brokers don’t handle COBRA documentation or enrollment.
FAQs and Troubleshooting
Does Take Command assist with COBRA or State Continuation benefits?
No, Take Command does not assist with or administer COBRA benefits. It is the employer's responsibility to manage these tasks.
What happens to ICHRA contributions after termination?
Employers are not obligated to continue ICHRA contributions after an employee’s termination. However, any existing funds already contributed can be used for eligible medical expenses by the former employee.
Related Topics
Transitioning Employees from ICHRA
Termination and Health Insurance Continuation
Employer Responsibilities Under COBRA
For further clarification, please contact your insurance carrier or legal advisor to ensure compliance with COBRA regulations in your specific circumstances.