The IRS released Final and Proposed COBRA regulations and we want you to be aware of the changes so that your business will remain in compliance and avoid penalties.  We are currently reviewing all health plans to insure that proper documents and procedures will be followed.  You can help us by understanding the new laws. 

Essentially, the changes relate to a recent Supreme Court decision (Geissal v Moore Medical Corp.) which mandates that “an employer may not deny COBRA continuation coverage to an employee on the grounds that he or she has already been covered by another health plan prior to making the COBRA election.  COBRA may only be denied when the employee becomes covered by another health plan after he or she has elected COBRA continuation coverage.”   While this rule has the potential to increase health plan costs, it should also simplify COBRA administration. 

The lynchpin question is this:  “Is the employee covered by another health plan before election to continue health insurance coverage with your company under COBRA?”  If so, you are still obligated to offer to continue coverage. 

Remember that it is our privilege and obligation to assist you with compliance issues.  This allows you to focus your efforts on improving your business.  Call today if you have additional questions.

• Advise all active employees of their COBRA and HIPAA rights
• Maintain telephone records of inquiries about COBRA and HIPAA
• Refer all inquiries about COBRA compliance to our office.

(See Nestingen, Carolyn S. and Wendy W. Citron.  “U.S. Supreme Court Decides on COBRA:  Employers Must Provide COBRA Even if Participant has Other Coverage at Time of COBRA Election.” http://www.briggs.com/cobra2.htm).