2020 COBRA Updates - What does it mean for us?
(Posted on 07/20/20)
2020 has certainly been an interesting year so far. As we all adjust to the “new normal,” one of the things we’re getting used to is constant change. It sounds crazy, but it’s true! The newest change we have to figure out is the COBRA rules.
On May 4, the IRS and EBSA issued guidance that sounded pretty much like a free for all. No elections or payments due until after the National Emergency ended- crazy! They left almost no guidance after that, so we were all left wondering what in the world this actually meant for us.
Two months later, we finally have some guidance from the carriers on what we’re supposed to do with this new information. To add to the 2020 craziness, it’s pretty much act just like we were before!
The main thing we need to know about the rule change is this- it is designed to protect the employee, not the employer. Just like before, if a group chooses to leave a former employee on the plan, they are going to end up on the hook for premiums owed to the carrier. Our best recommendation for employers is that they take off the former employee and add them on retroactively, if and when they make their election and payment. The carriers have assured us that they’ll be flexible with the retroactive enrollments, but will enforce their normal termination rules. No one wants to get stuck holding a bill for six months’ worth of premium on a former employee!
So in the midst of the insanity that has been 2020, at least this feels familiar to us. As always, we are here to answer any questions you may get from your clients. Please don’t hesitate to reach out to our team with anything you may need.
On May 4, the IRS and EBSA issued guidance that sounded pretty much like a free for all. No elections or payments due until after the National Emergency ended- crazy! They left almost no guidance after that, so we were all left wondering what in the world this actually meant for us.
Two months later, we finally have some guidance from the carriers on what we’re supposed to do with this new information. To add to the 2020 craziness, it’s pretty much act just like we were before!
The main thing we need to know about the rule change is this- it is designed to protect the employee, not the employer. Just like before, if a group chooses to leave a former employee on the plan, they are going to end up on the hook for premiums owed to the carrier. Our best recommendation for employers is that they take off the former employee and add them on retroactively, if and when they make their election and payment. The carriers have assured us that they’ll be flexible with the retroactive enrollments, but will enforce their normal termination rules. No one wants to get stuck holding a bill for six months’ worth of premium on a former employee!
So in the midst of the insanity that has been 2020, at least this feels familiar to us. As always, we are here to answer any questions you may get from your clients. Please don’t hesitate to reach out to our team with anything you may need.
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