Employer Services
COBRA
COBRA compliance is not only time consuming,
it can be confusing. To ease the process, Cornerstone’s dedicated
team of experts offers flexible, dependable COBRA administration.
With our secure web-based tools, we take care of everything from
initial notifications to employee communication so you’re
always in compliance.
To find out more about your responsibilities under COBRA, see our
FAQ's.
What is COBRA?
Congress passed the landmark Consolidated Omnibus Budget Reconciliation
Act (COBRA) health benefit provisions in 1986. The law amends the
Employee Retirement Income Security Act, the Internal Revenue Code
and the Public Health Service Act to provide continuation of group
health coverage that otherwise might be terminated.
COBRA provides certain former employees, retirees, spouses former
spouses, and dependent children the right to temporary continuation
of health coverage at group rates. This coverage, however, is only
available when coverage is lost due to certain specific events.
Group health coverage for COBRA participants is usually more expensive
than health coverage for active employees, since usually the employer
pays a part of the premium for active employees while COBRA participants
generally pay the entire premium themselves. It is ordinarily less
expensive, though, than individual health coverage.
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Why Outsource with Cornerstone?
COBRA administration is a complex process governed by constantly
changing rules and regulations. Worse, virtually every aspect of
COBRA is extremely time sensitive, so prompt and proper actions
are critical.
COBRA coverage is risky. As an employer you face significant potential
liability for non compliance. But an even greater risk exists, in
terms of adverse selection and payment of unnecessary claims. Consider
this:
- Claims costs
for COBRA participants is 150% greater than the costs for
active employees.
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- COBRA non
compliance can be costly. The maximum excise penalty is $500,000
or 10% of the health plan costs for the previous year. In
addition to daily fines of $150 per qualified beneficiary
in non compliance.
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The Cornerstone COBRA Difference
At Cornerstone we help to minimize all of the risks while delivering
significant savings in time and productivity for your company –
savings that you can reinvest in your business.
We generate savings through:
- Administrative
efficiencies such as auto cancellation, payment screening,
ACH payment processing and online employer processing systems.
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- Compliance
with the law while minimizing elections and participation
duration on COBRA.
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- Limiting
adverse selection, thereby reducing medical cost ratios.
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The Cornerstone COBRA Service Offer
Cornerstone will promptly take care of the necessary communications,
notices, forms and record keeping. We even collect the premium payments
from your COBRA participants. Team Cornerstone keeps you in compliance
with this complex federal law.
Our COBRA Administration Services:
- Contractual
assumption of liability for all of your COBRA administrative
procedures.
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- Provide easy
to understand monthly account reports delivered via email
or regular mail.
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- Send COBRA notification
packet to qualified beneficiaries.
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- Provide premium
payment coupons with ACH debit capability.
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- Send late payment
notices.
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- Manage grace
periods for timely notifications.
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- Handle
all dependent communications.
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- Provide
web based tool for you and any qualified beneficiary to view
account status.
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Our Internet Technology
As a Cornerstone COBRA client, you will be able to enter the initial
DOL notifications and qualifying event information through teamcornerstone.com.
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COBRA
Customer Service Center
We train our staff on the ins and outs of COBRA law before they
begin answering calls and we keep them updated by attending seminars
and providing them with periodicals and electronic updates. We want
to be accessible to our customers so we make sure that all calls
receive the assistance of a live person and a prompt response to
all inquires.
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