How does GoCo process COBRA?

A guide on what COBRA is and how GoCo handles it.

Per the US Department of Labor:

COBRA gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.

COBRA generally requires that group health plans (sponsored by employers with 20 or more employees in the prior year) offer employees and their families the opportunity for a temporary extension of health coverage. This is called continuation of coverage and may occur when coverage under the plan would otherwise end.

For employers under 20 employees, continued coverage is handled at the state level, rather than federal, and will vary by state.

Now that we know what COBRA is, let's discuss how GoCo works with it!

A general guideline is that GoCo does not process anything related to COBRA, but we do help notify the responsible party when an action needs to be taken. You can set these notifications in Company Permissions on GoCo.

What happens when someone is hired in GoCo?

  1. Once the employee becomes eligible for benefits, GoCo sends a "COBRA general notice" notification to the COBRA processor within GoCo. Who processes COBRA notifications is discussed during your implementation process with GoCo.
  2. The general notice should be sent out via postal mail within 90 days of being eligible for benefits. The notice describes general COBRA rights and employee obligations, when it may become available to an employee and their family, and what is needed to protect eligibility.

What happens when a qualifying event occurs (like a termination)?

  1. Once the employee is terminated in Goco, the benefit sync dashboard is triggered to notify the processor that the employee was termed, to notify the carriers of the loss of benefits, and to send the COBRA packet to the employee with Ameriflex. 
  2. Once the employee receives the packet, they enroll in the COBRA benefits with Ameriflex.
    1. This packet should include continued coverage based on a company's current plans available to the employee.
  3. Ameriflex then contacts the carriers to reinstate coverage. 
  4. The termed employee's company is responsible for paying premiums to the carrier and Ameriflex collects the premium from the employee. 
  5. Once payments stop or COBRA period ends, Ameriflex notifies carrier to terminate coverage 

What is a qualifying event?

A COBRA Qualifying Event gives the green light for the processor to "Offer continued coverage". There are seven qualifying events to trigger COBRA notifications:

  • termination of a covered employee’s employment (other than for gross misconduct);
  • a reduction of a covered employee’s hours of work causing a loss of coverage;
  • the covered employee’s death;
  • a divorce or legal separation from the covered employee;
  • a dependent child of the covered employee ceases to be a dependent under the terms of the plan;
  • the covered employee becomes entitled to Medicare; and
  • an employer bankruptcy (this is applicable for retiree plans only)

 

If you have any questions, please let us know using help@goco.io!