While open enrollment is winding down for many, COBRA’s might be just around the corner. Will you be caught off guard? Benefit Resource (BRI) has a comprehensive guide to help you gear up for your enrollment period.
WHAT IS COBRA OPEN ENROLLMENT?
COBRA is very similar to the typical open enrollment period. Qualified beneficiaries are entitled to the same rights as active employees during open enrollment. Meaning they have the right to change benefits and add/remove dependents during this period. Qualified beneficiaries also receive access to the same benefits, choices, and services that similarly situated employees have, including open enrollment.
WHO NEEDS TO BE OFFERED THIS OPEN ENROLLMENT?
Open enrollment must be offered to all active COBRA participants and any qualified beneficiaries. Qualified beneficiaries include individuals who are still eligible to elect COBRA coverage.
Individuals must enroll in an existing COBRA benefit before moving forward with open enrollment. Therefore, plan sponsors (the employer) do not need to offer it to individuals that declined, ended, or otherwise do not elect COBRA coverage.
Even if you don’t have COBRA-qualified beneficiaries, it is still important to update systems of record with new benefit information.
WHAT BENEFITS MUST BE OFFERED?
For the new plan year, plan sponsors must offer all COBRA eligible benefits provided to ‘similarly situated’ employees. This likely includes your health plan, dental and vision benefits. For example, you decide to offer a new health plan option. The health plan must be offered to COBRA participants.
WHAT ARE THE RULES FOR QUALIFIED BENEFICIARIES WHO ARE ELIGIBLE TO ELECT COBRA?
COBRA is continuation coverage. The qualified beneficiaries must enroll in continuation coverage for the current plan year. Then, they are eligible to make benefits changes during this open enrollment. If the individual fails to enroll in continuation coverage of the existing benefits, they would not be eligible during open enrollment.
WHEN DOES COBRA OPEN ENROLLMENT OCCUR?
In preparation, open enrollment should be looked at 30-60 days prior to the effective date. This allows 30 days to make any changes with your carrier. This means an individual will have until January 30 to elect and/or change coverage in the plan beginning on January 1.
WHAT HAPPENS IF AN ACTIVE COBRA PARTICIPANT FAILS TO ELECT COVERAGE DURING OPEN ENROLLMENT?
COBRA participants have the same rights (and responsibilities) as similarly situated employees. If you require active enrollment by employees during open enrollment, you can require active enrollment by COBRA participants. If you have passive enrollment, COBRA participants can maintain their existing coverage and/or be enrolled in the default coverage option.
HOW ARE COBRA PARTICIPANTS NOTIFIED OF OPEN ENROLLMENT?
COBRA participants must receive a packet, which contains all required open enrollment disclosures. Additionally, the packet must include any updates or changes to rate information. Plan sponsors may send these packets directly to COBRA participants.
Alternatively, plan sponsors may use a COBRA administrator to provide these packets. These packets are modified for COBRA-qualified beneficiaries. Avoid a common pitfall and don’t assume your COBRA administrator automatically sends these on your behalf. Open enrollment packets are generally an opt-in service. You will likely be asked to provide updated plan and rate information to your COBRA administrator. If you are not sure, your packets for enrollment have probably not been sent. It is worth reaching out to your COBRA administrator.
To learn more about BRI or how to prepare for COBRA open enrollment, please visit benefitresource.com.
Resource
Department of Labor: https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/cobra-continuation-health-coverage-consumer.pdf
