COBRA Administration Services
If you offer a group health plan, you might need to offer continuation of health insurance coverage to certain employees and their qualified beneficiaries following termination or other qualifying events.
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COBRA/Continuation Coverage That’s Easy to Manage and Maintain
Get COBRA solutions, support, and expertise from Paychex and avoid the hassle of in-house COBRA administration so you can stay focused on other priority business initiatives. We can help you track changes to COBRA laws, manage their effect on your continuation program, and simplify paperwork and daily administrative tasks, including:
- Sending timely notices to qualified candidates' beneficiaries
- Tracking participant election periods
- Understanding COBRA compliance and obligations
- Requesting initial COBRA notices for new hires
- Communicating enrollments
- Offering participant support available for questions
- Self-service to add new plans and more with COBRA Web Service
- Terminations to carriers for Paychex Insurance Agency clients
- Collecting premium payments from participants
Get Help Managing the Complexities of COBRA Administration
Maintain compliance and reduce expenses
Penalties may cost employers hundreds of dollars for each day that an employer is not in compliance.* Employers also may be responsible for legal fees, medical claim payments, and more. Let Paychex help you save time and money by monitoring federal and state laws and regulations to help you stay up to date.
Continuation of coverage may vary by state
Continuation of coverage compliance for employers can be difficult because states may have laws requiring continuation of health insurance coverage that come with their own requirements and penalties. We can help manage compliance at the state level, too.
Managing COBRA takes times
It takes time to set up and administer a COBRA/Continuation coverage program — time that could be spent focusing on your business. Let Paychex handle the time-consuming tasks.
COBRA/State Continuation Noncompliance is Costly
Employers may be subject to penalties: $100 per beneficiary ($200 per family) for each day of a COBRA noncompliance period; $110 per day, per qualified beneficiary, for failure to provide required notices. Employers also may be responsible for legal fees, medical claim payments, and more. Penalties for state continuation noncompliance vary by state.
Stay Protected
Consider other programs and insurance that can support and protect your business and its employees.
FAQs on COBRA Administration
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What is COBRA insurance and how does it work?
What is COBRA insurance and how does it work?
Under COBRA, a worker can choose to continue health insurance coverage/benefits provided by their group health plan for themselves and their beneficiaries after loss of a job (whether through termination or voluntary separation), reduction in hours, or other qualifying events. Qualified individuals may be required to pay the entire premium. Learn more about COBRA
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What does a COBRA administrator do?
What does a COBRA administrator do?
A COBRA administrator manages the requirements of a program, which include notifying eligible participants about their rights, collecting premiums, providing notice of eligibility and other forms (enrollment), along with how long the coverage period is. Administrators also must provide notice when coverage ends.
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Who is the plan administrator for COBRA?
Who is the plan administrator for COBRA?
Administration of COBRA can be managed in-house or by a third-party COBRA administrator. However, compliance obligations are the legal responsibility of the employer.
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Who qualifies for COBRA?
Who qualifies for COBRA?
An individual who participates in an employer-sponsored group health plan prior to a qualifying event (e.g., termination) is eligible for COBRA coverage. An employee's covered beneficiaries (spouse, dependents) also can qualify. However, individuals (and their covered spouse, dependents) only qualify if the company they work for employs at least 20 people on more than 50 percent of business days in the previous calendar year. An exception is State Mandated COBRA requirements, where applicable.
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Why is COBRA so expensive?
Why is COBRA so expensive?
COBRA is expensive because the individual is paying the entire cost of the insurance, whereas when they were employed, their employer might have covered a large share of the healthcare insurance premium.
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How long does COBRA coverage last?
How long does COBRA coverage last?
Depending on what type of qualifying event, COBRA coverage can last 18 months, 29 months, or 36 months. If the event was a reduction of hours or termination of employment for reasons other than gross misconduct, then it is 18 months. If an individual covered under COBRA develops a disability, then they get an extension to 29 months. If, by chance, a second qualifying event occurs during the first 18 months of COBRA coverage, then an individual (and their beneficiaries) qualify for 36 months of coverage.
