COBRA premium payment checklist


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A checklist on things employers should consider in their COBRA premium payment practices, from Mandated Health Benefits--The COBRA Guide

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COBRA premium payment checklist

  1. 1. Determining and Collecting Premiums ¶1444 Fig. 1444 COBRA Premium Payment Checklist Premium Administration Issue Employer/ Sponsor TPA Comments? Responsibility? Responsibility? I. Bill and collect COBRA premium payments 1. Send monthly invoices? 2. Provide premium coupon books? 3. Allow for online premium payment? II. Content of invoice or coupon 1. Premium amount 2. 2%/50% administrative charge 3. Due date and grace period 4. Address for premium payment 5. Warning of conse- quences for late pay- ment 6. Explanation of rules on insufficient payment (significant vs. insignifi- cant underpayment) III. What if qualified ben- eficiary wants to add or change coverage, add or delete dependents or make other cover- age changes that impact the premium payment? Whose responsibility is it to communicate the revised premium? IV. What if the employer adds/drops/modifies a coverage alternative? When does the employer have to inform the TPA of the change? What are the TPA’s responsibilities to communicate revised premiums? V. Who is responsible for notifying TPA of all changes in insurer, premi- um rates, or other matters affecting plan coverage?© Thompson Publishing Group August 2011 Tab 1400 • Page 93
  2. 2. ¶1444 Determining and Collecting Premiums Fig. 1444, continuedPremium Administration Issue Employer/ Sponsor TPA Comments? Responsibility? Responsibility? VI. What if an insurer passes through a premium re- bate, refund or other divi- dend? Whose responsibil- ity is it to pass through any savings to qualified beneficiaries? VII. Whose responsibility is to notify qualified benefi- ciaries of late premium payments? When is this going to be done? VIII. What happens if a pre- mium payment is not sufficient for the full premium? How will the payment be applied (e.g., apply as much as pos- sible to coverage that can be paid in full and notify of deficiency for other coverage?)? IX. Who establishes the pol- icy for insufficient funds checks or stop payments? X. Who is responsible for informing providers of the status of qualified ben- eficiaries pending their payment? XI. How quickly will premium payments be forwarded to insurer or sent to employ- er? XII. Who will maintain records of premium payments and postmarks? XIII. Who will respond to inqui- ries concerning premium payments? XIV. What is the applicable grace period? 1. Standard 30/45-day periods under COBRA? 2. Plan-based grace periods (at least as long as COBRA)? XV. Are the rules established for calculating days (e.g., do Saturdays, Sundays and legal holidays count)?Page 94 • Tab 1400 August 2011 Mandated Health Benefits
  3. 3. Determining and Collecting Premiums ¶1444 Fig. 1444, continued Premium Administration Issue Employer/ Sponsor TPA Comments? Responsibility? Responsibility? XVI. What policies on “tolling” the premium payment period will apply (e.g., in cases of an incapacitated qualified beneficiary)? XVII. Who will communicate rules to third-party payers (e.g., medical providers, hospitals, Medicaid agen- cies, etc.) who might pay COBRA premiums? XVIII. Who will establish coordi- nation with HCTC admin- istration at IRS? XIX. What special premium arrangements might apply (e.g., severance arrange- ments)? XX. What compensation ar- rangements are made for the TPA? 1. Normal fees 2. Fees for extra services 3. Fees upon termination of the contract XXI. Who is responsible for calculating, communicat- ing and administering the ARRA premium subsidy?© Thompson Publishing Group August 2011 Tab 1400 • Page 95