Spring is in the air. It’s time for a thorough spring cleaning – and it’s not just your closet that needs attention. This is the perfect time for a COBRA Open Enrollment spring cleaning. Check for enrollment mistakes now, before the costs add up. Now is the perfect opportunity to evaluate the good and the bad of this past open enrollment season to implement changes now, not next year when we’re in the hustle and bustle of the season.
COBRA Enrollment Mistakes Can Be Costly
Open enrollment is a busy time, meaning some things may slip through the cracks. Unfortunately, when that includes COBRA enrollments, major headaches and expenses can follow.
For example, let’s say you have a COBRA participant who did not select a plan for 2022. If the Plan requires each member to re-enroll, this participant no longer has coverage. Several months later, the individual is upset because his health insurance claim was denied when he went to the hospital. He assumed his coverage was automatically renewed – he says he never received information about his plan options during open enrollment. Indeed, neither the plan sponsor nor the COBRA administrator sent out this information because both thought the other was doing it. Now the individual is suing.
Problems can also occur if COBRA participants are not disenrolled from plans when they should be. If the employer is paying the premium, this can be especially expensive. Furthermore, retroactive cancellation may not be possible – carriers may not allow a retroactive termination of more than 30-60 days. According to HealthCare.gov, the ACA makes retroactive cancellation of a health insurance policy illegal except in the case of fraud or intentional misrepresentation of material fact. Likewise, problems can occur when COBRA participants are enrolled in the wrong plan (which gives them different costs and benefits) or billed the incorrect amount for their plan.
If a mistake occurs, you may not catch it immediately. That’s why spring cleaning is important – a regular review can help you catch mistakes as soon as possible.
Your COBRA Administration Spring Cleaning Checklist
- Did everyone who experienced a Qualifying Event receive the required election notices? Failure to provide these notices can come with pricey noncompliance penalties of $110 per day.
- Did all COBRA participants receive an open enrollment packet? Under ERISA, COBRA participants are entitled to the same open enrollment rights as active employees.
- Are all COBRA enrollees supposed to be enrolled? Check the list of plan enrollees and verify that everyone enrolled in the plan is supposed to be enrolled. Look for anyone who was enrolled by mistake or who should have been disenrolled but was accidentally left on the plan. Be sure to check spouses and dependents as well as recently terminated participants.
- Are there any COBRA participants who did not enroll in a plan? If you have people who are eligible for and elected COBRA but did not enroll in a plan for 2022, something may have gone wrong. It’s possible the COBRA participants decided not to enroll or missed the deadline, but it’s also possible there was a mistake on your end.
- Are all COBRA participants in the correct plan? If participants have multiple plan options, make sure they’re in the right plan. Keep in mind that COBRA participants may be able to change their plan elections during open enrollment because they’re entitled to the same open enrollment rights as active employees.
- Are all COBRA participants being billed correctly? Check the premiums and verify that all COBRA participants are being billed for the right amount. Billing needs to reflect any changes to plan selections or costs with the new year.
Evaluate your Open Enrollment Procedures
Now is the perfect time to take stock of your current Open Enrollment processes to see what went well, what did not work, what needs changing and how you can improve. Waiting till the start of the next open enrollment season begins may not give you enough time to implement changes and its easy to forget what items may need to be spruced up. Open Enrollment is never perfect, but planning now will give you the advantage you need to avoid costly mistakes, streamline your services, and reduce stress during such a busy time.
- Were you able to get renewal rates from brokers or customers in a timely manner? As a common cause of open enrollment delays, identify the timelines needed and the method in quick you’re collecting the new rates and plan specifics. Identify customers that you may want to start working with Open Enrollment planning early.
- Is your open enrollment offering to customers standard or unique to each customer and priced correctly? Consider consolidating to a single or small set of Open Enrollment package options for customers. Evaluate the cost of time, materials, postage and resource commitments to perform these services and ensure they are clearly documented for consideration when a customer would like you to fulfill the COBRA Open Enrollment obligations.
- How are you communicating the Open Enrollment status to your internal team members as well as customers? Sharing the status and timeline updates as to the status and progress of each customer is key for those on the front lines receiving phone calls from participants or answering customer questions.
- Do you have the right procedures in place and documented? Often times, administrators may bring in temp resources or borrow from other teams. Proper training is key for this, writing and recording video/demonstrations of these will help move those resources faster. Procedures in general can vary at open enrollment such as: annual coupons after enrollment, eligibility updates to carriers, short or deficient payments when premiums change, handling of new qualifying events while open enrollment is occurring.
Staying in Compliance During Challenging Times
Benefits administration has been particularly complicated recently. During the COVID-19 outbreak period, the normal timeframes for COBRA qualifying event and disability extension notices, COBRA elections, and COBRA premium payments have been paused. The outbreak period is set to end on July 10, 2023, at which point normal timeframes will resume.
This will, no doubt, be a hectic time for COBRA administrators. You need to make sure everything else is in order, which includes double-checking current COBRA enrollments.
It’s also a good time to make sure you are equipped with the best tools. Travisoft’s COBRA administration platform automates workflows and provides customized reports with real-time data, giving you the automation you need to simplify COBRA administration. Our Open Enrollment module of TCOBRAWEB 2.0 can help you automate Open Enrollment, eliminate manual work, reduce errors and relieve the stress of your team.