Administrative and Compliance Services
There are a variety of Administrative and compliance responsibilities for employers who sponsor group benefit programs. A proactive approach is the best method for ensuring ongoing compliance and protecting the plan sponsor from penalties and other associated liabilities. We work with local and national programs to find you the best solutions for your administrative and compliance needs
Below is a list of COBRA responsibilities for employers with 20 or more employees. COBRA compliance is best achieved by using a professional administrator such as Ceridian COBRA Services. Professional COBRA administration is expected to include the following services and fees.
- Provide Initial Notice to employees of COBRA Rights
- A COBRA premium subsidy may be available for those who lose their coverage due to foreign trade
- Provide COBRA Qualified Beneficiary Letter for employees who become ineligible for the medical plan
- Manage COBRA Eligibility with Carriers
- Bill and Collect COBRA Premium
- Track COBRA Time Limits
- Provide All Other Required COBRA Letters and Notifications
- Provide Detailed Monthly Employer COBRA Report
- Customer Service for COBRA Continuant
- Compliance Support
- On-Line Web Access Portal for QBs and Admin (No Additional Charge)
- Recommended administrator is Allegiance Benefit Plan Management or Ceridian Cobra Services
- Typical fees; Setup Fee: varies, COBRA Monthly Fee for empoyers from 20-30 employees is approximately $50.
This is the continuation option required for groups with fewer than 20 employees. When a covered employee loses their eligibility for employer paid benefits, the employer must offer the employee continued coverage for up to 9 months for Oregon. The employee pays the same coverage and has the same benefits as actively working emloyees on the plan. This continuation option is administered by the group. We can help with notification and enrollment.
When employees contribute on a pre-tax basis from their pay checks for qualified beneits such as health insurance, compliance is required. Compliance for pre-tax activity includes; non-discrimination testing, docuemntation retention including plan documents and summary plan description, employee enrollment forms and annual non-discrimination testing.
Cafeteria Plan/Flexible Spending Account;
This is much like the pre-tax premium contributions, except employees and employers can contribute money to a flexible spending account on a pre-tax basis to spend on a variety of qualified benefits. The deposits are taken from pre-tax payroll deductions and spent on qualified benefits with no tax liability. Compliance for this activity is the same as the pre-tax activity above. There will be variations in the documents.
Health Reimbursement Account;
The Health Reimbursement Account allows employers to help covered employees with certain expenses outlined in the benefit. In a typical HRA, employers may contribute 50% of the employee deductible, office co-pays, etc. Employee benefits received throught HRA are not taxible. Typical set up fee is $250 with a minimum monthly charge of $50 or $4.50 per employee per month.
Health Savings Account Banking;
A common preferred provider health insurnace program is called a Health Savings Account. This type of health insurance program typically subject all care to deductible except for some preventive care. As an incentive to purchase this type of policy, the United States Treasury allows policyholders on these specific plans to deposit tax-free money and use for tax-free qualified medical expenses. More information on the Health Savings Account plans and banking are available at your request.
Below are some comments and facts regarding partial or fully insured health plans:
- This concept is usually not feasible for new groups or groups under about 500-1000 employees. This is due to the unpredictability of claims costs, administrative costs
- Self-insuring with no prior plan or claims data can be challenging
- Carrier availability of self-funding concepts is limited, if available at all for groups of around 100-200 employees. There may be more carrier interest for 2014
- Employers still take employee pre-tax contributions and the funds are placed in a reserve fund, held by the administrator or carrier for claims payments
- Carriers or administrators will have a monthly administrative fee to process claims. This could be $30/$35 per employee, per month?
- Employer involvement in the programs can be labor and time burdens
- A single large claim can deplete reserves and initiate a stop-loss claim. Stop-loss insurance can have high deductibles such as $60,000-$80,000?
- Stop-loss insurance premiums could be high at $5,000-$10,000 per month?
- UnitedHealthcare is working on a self-insured option, but employers are expected to need 150+ employees to participate
- Health Net is working on self-funding ideas, but are not expected to have options until January, February or March 2014
- Employers with no prior health plan may find it a challenge to estimate claims experience and plan feasibility.
- If an employer wants to self-insure, it is recommended that a fully insured program is installed for one year and than claims can be reviewed to see if self-funding is an appropriate plan strategy.