Who is administering your COBRA? If it’s an insurance carrier they may not be administering all aspects of the eligible benefits. Read and make notes, better yet verify your COBRA plan is being properly administered. The fines for failing to do so can be staggering.

COBRA provides former employees, spouses, and dependent children the right to temporary continuation of health coverage at group rates. But you knew that. And most likely you know it covers dental and vision. However, did you know it covers EAP, GAP (group, not individual), Telemedicine, FSA and HRA plans?

The tricky administration comes FSA, the rules are based the 12-month plan year, which might not be the calendar year. If an employee has funds remaining in their FSA account at the end of the plan year they may not be able to use it in the next plan year. i.e. If the FSA is a December 1 to November 30 and an employee terminates on June 5, 2018, if they elected COBRA, that participation would end on November 30, 2018.

HRA accounts can also cause issues. HRA dollars must be available to COBRA participants. Employer’s may not like paying medical bills of former employees, it drives up their utilization rate.
Remember, COBRA was set up to protect employees, not employers.

Thanks to Susan Luskin, Diversified Administration www.div125.com, for her excellent CE class “If we have an Individual Mandate, why do we still need COBRA?” The above is a small, but important, part of her class.


Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.