How do you sign up for COBRA?
It is important that employers communicate to employees their right for continued benefits once a qualifying event happens. Employers must notify covered employees and covered spouses of their initial rights under COBRA when they first join the plan. Employers must notify covered persons of their election rights to continue coverage after a qualifying event occurs. Employers have 30 days to notify the plan administrator (typically the insurance company) when a qualifying event occurs. In the event of divorce or change of status by a dependent, employers have 60 days. Once notified, the administrator has 14 days to notify the individual entitled to COBRA coverage. After an employee receives notification from an employer, the employee has 60 days to notify the employer that he or she wants coverage. The employee generally pays the full cost of COBRA insurance premiums. The law allows the employer to charge 102% of the premium—the extra 2% is meant to cover administrative costs. If an employee receives extended COBRA coverage due to disability, the employer can charge 150% of the premium for months 18 through 29. Federal law states that COBRA coverage can be terminated if premium payments are late. Payment is considered timely if it is made within 30 days after the due date or within a longer period set out under the plan. The due date must not begin before the first day of the coverage period. Additionally, when an individual chooses to take COBRA coverage, he/she has 45 days to make the first payment. Most insurers want employers to pay in advance for coverage, and while that can complicate the process, the law states that employers must give individuals receiving COBRA coverage a 30-day grace period from the time the payment is due. Complying with and adhering to COBRA laws can be challenging and demanding. Fringe Benefit Analysts is here to help.