How does GoCo handle 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.

Once an employee is hired we send a "COBRA general notice" notification to the COBRA processor in GoCo. 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.

Once an employee has met a COBRA Qualifying Event, GoCo notifies the processor to "Offer continued coverage". A packet should be mailed to the employee, offering continued coverage, based on a company's current plans available to the employee.

There are seven qualifying events to trigger this COBRA notification:

  • 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)

Who will handle COBRA notifications is discussed during your implementation process with GoCo.

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