COVID-19 COBRA Timeframe Extensions

On March 13, 2020, President Trump issued the Proclamation on Declaring a National Emergency concerning the COVID-19 outbreak with an effective date of March 1, 2020. As a result of the National Emergency, participants and beneficiaries covered by group health plans (or other employee welfare benefit plans) may be encountering problems in exercising their health coverage portability and continuation coverage rights. For this reason, Federal government agencies have extended certain timeframes otherwise applicable to group health plans. Although the National Emergency changes numerous timeframes, this article will address how the law affects COBRA.

With many businesses closing down over the past couple of months, employees (and COBRA Participants) have many questions related to their employer-sponsored group health plan. What if my employer doesn’t pay the group insurance premium? If I am terminated, will COBRA be offered to me? I sent back my COBRA Election Form with premium, but I have not been reinstated – what should I do? The Third Party Administrator that collects my COBRA premium is closed and not forwarding the funds to my employer – will I be terminated? In these recent months, many individual’s health coverage was/is in jeopardy, so the government took action to slow down the process of terminating employees from a group health plan.

To make sure people did not inadvertently lose coverage, the government extended COBRA-related timeframes until the end of the “outbreak period.” The question is - when is the end of the outbreak period? At the time of this publication, that date had not been determined. The Federal Register states that COBRA related timeframes will be placed on hold until an “outbreak period End Date” has been announced. Once the End Date has been determined, they are providing a sixty (60) day processing period before the normal COBRA-mandated timeframes begin. For example purposes only, if the outbreak End Date is determined to be June 30, 2020, we can then calculate the COBRA-related timeframes. First, we add the 60-day processing period, establishing an August 29, 2020 “Determination Date.” From this Determination Date, we would begin tracking COBRA’s normal mandated timeframes.

COBRA Qualifiers with a qualifying event date between March 1, 2020 and August 29, 2020 (based upon the above example date) would be offered their 60-day election period beginning on the Determination Date to elect COBRA. Administrators would still notify the insurance carrier to terminate group coverage as of their qualifying event/loss of coverage date. If they elect COBRA, they would be reinstated back to the date coverage was lost and provided 45-days from August 29th (as in the above example) to make their initial COBRA premium payment. It is recommended that you do NOT reinstate these Qualifiers until an initial premium payment is made. COBRA Qualifiers may NOT elect their COBRA Start date; they will be retroactively reinstated to the date coverage is lost and responsible for all premium payments back to their COBRA start date.

Premium payments that are received will be applied to the first month that premiums are due. So, if a Participant is paid through April 30th and you receive a payment in August, those funds would be applied to May and following months in succession. The Participant is NOT allowed to tell you what months they wish the payment to apply.

During the outbreak period, if premium payment is not received, the Participant’s account should be suspended. Administrators should notify the carrier that the Participant had not made their standard payment and should be terminated/suspended at that time. The software will inform you in the Things-to-do box to send a COVID Suspension notice (instead of the usual termination for nonpayment notice). This will be the Administrator’s trigger to contact the insurance carrier(s) and inform them to terminate/suspend the Participant’s account. If payment is received within the 30-day (45 day initial) grace period (commencing on the Determination Date), payment will be applied beginning with the month after the paid through date. Claims will be paid for months with full premium payment.

For nonpaying COBRA Participants during the outbreak period, they will be informed by health providers and pharmacies that they do not have coverage. The suspension notice informs them to keep receipts for all covered benefits and submit a claim for reimbursement after premiums are paid. Participant will need to work with the insurance companies in receiving reimbursement for incurred claims during the extension.

Federal Government Release:
Federal Register - hhttps://www.federalregister.gov/documents/2020/05/04/2020-09399/extension-of-certain-timeframes-for-employee-benefit-plans-participants-and-beneficiaries-affected

Department of Labor - https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/covid-19.pdf

Software Changes – Version 20.4.x

When you perform an update (as explained in this newsletter), you will want to verify that you have version 20.4.x which will be shown under the COBRA Solutions logo in the upper-right hand corner. The first thing you will notice is a new menu item named “COVID-19.” This is where you will go for instructions and to produce additional notices.

You will need to notify the following people of these timeframe changes:

1. New COBRA Qualifiers (since the implementation of this version);
2. Qualifiers with a “loss of coverage date” after 02/29/2020 who were sent a Qualifying Event Letter without COVID-19 information;
3. COBRA Participants who have been terminated for nonpayment of premiums after 02/29/2020 and have been sent a termination letter; and
4. COBRA Participants (who normally would be terminated for nonpayment) will need to be notified that their account will be suspended.

Let’s take a look at how the software will work with this new version for each of the affected people above.

New COBRA Qualifiers
The software will be inserting the COVID-19 information automatically for COBRA Qualifiers who experience an event on or after 03/01/2020 to the Determination Date. This is important for you to understand because if you open the DOL Qualifying Event Letter to Review/Edit, you will not see the COVID information. It is inserted as the letter is being produced. We are doing it this way so that when we reach the Outbreak End Date, all you will need is an update to the software and not update the letters (again).

The letter will first inform the Qualifier of the National Emergency in the second paragraph and the timeframes explanation will be found at the end. Since we don’t know when the End Date will be, we explain the date generically and place an asterisk by each COBRA designated timeframe. When they announce the outbreak End Date, we will change the software and in code change the information referencing an actual date.

Qualifiers Who Already Received a Qualifying Event Letter
You probably have sent qualifying event letters since the Federal Registry’s release of the timeframe extension. We have created a notice to let those individuals know of the change in timeframes that affect them. This is a one-time notification that should be printed out and sent as soon as possible.

To produce this letter, select the COVID-19 Letters option under the COVID-19 menu. The first page has your instructions for producing the notices. Click the “Produce Letters” tab and under Step #1, select the “Qualifying Event COVID Update Letter.” If you click the Review/Edit button, the letter will appear and you may make edits as you see fit. If you change the letter, remember to click the Save button prior to closing the letter. (If you are a TPA, there is only one letter and not a different letter for each group so keep that in mind if you edit the letter.)

When you select the letter from the list, it will place the names of all Qualifiers (for all groups) who experienced an event on or after 03/01/2020 and sent a qualifying event letter that did not have COVID information enclosed. Select all the people from the list to send to the printer. Larger TPAs who have hundreds of people in the list may want to break up the amount of letters to be sent to the printer into a manageable amount (returning and performing the procedure again until everyone’s letter has been sent to the printer). Lastly, click the Print button to send to the printer of your choice.

COBRA Participant Termed for Nonpayment after 02/29/2020
These individuals were sent a termination for nonpayment of premium letter with an effective date after 02/29/2020 that did not address the COVID-19 timeframe extensions. On the same COVID-19 letters form, select the “Termination for nonpayment COVID Update Letter” under Step #1. The list of affected people that received the nonpayment termination letter without COVID-19 information will be displayed. Like the Qualifiers notice, you may review and edit the letter. In Step #2, select all the people in the list followed by clicking the Print button.

After producing and sending these notifications, you will be done with this form and will not have to send these letters to anyone else.

COBRA Participants New COVID Suspension Letter
Prior versions of the COBRA Administration Manager software would notify users in the Things-to-do list to terminate a Participant for nonpayment. You would double click on the item and it would then say to send a termination letter to the Participant. The process will be changing. Instead of telling you to terminate the Participant for nonpayment, it will tell you to send a COVID-10 Account Suspension Letter.

The suspension letter will advise the Participant that the insurer will not be paying claims until premium is received and determining the last day payment may be made. You may review/edit the letter by going under the Notifications Menu, selecting the “Edit/Review a Letter” option and choosing the COVID Account Suspension Letter.

You will need to contact the insurance carrier and notify them to terminate/suspend these Participants accounts. At this point, we do not know how insurance companies are going to handle these extensions. By informing them about these nonpaying Participants, the carriers may terminate or suspend their account. If we do not inform them and they end up paying claims for a nonpaying Participant, the carriers may request the employer to pay premium for the months that claims were paid.

New COBRA Notices (Medicare)

For the second time this year, the Department of Labor has released new revisions of the DOL General Notice and DOL Qualifying Event letter. The revised model notices provide additional information to address COBRA’s interaction with Medicare. The model notices explain that there may be advantages to enrolling in Medicare before, or instead of, electing COBRA. It also highlights that if an individual is eligible for both COBRA and Medicare, electing COBRA coverage may impact enrollment into Medicare as well as certain out-of-pocket costs (DOL website).

To receive these new letters, you need to update your software.

Update your Software

The most common method for obtaining the update is to:

1. Under the File menu, select the “Update Software via Internet” option. (If Microsoft Windows asks if you wish to start as “Administrator,” select “No.”).
2. Click the Next button to access the files.
3. You will be asked if you wish to review the new letters. You can select the desired letter and you will be shown the changes in red text.
4. Click the Next button and you will be provided a button to select the letters you wish to update and the groups that will be updated. If you do not select the letters (not recommended), they will not be updated in your system.
   1. If you are a Third Party Administrator and make changes to the notice (i.e. letterhead), you may only want to update one group.
   2. Upon completion, you can add/remove information as you wish and then save the document.
   3. Once saved, close the document and then go to the  Notifications menu heading.
   4. Select, Copy Letters to Other Groups.
   5. Pick the altered letter(s) and the groups you wish to update.
   6.  Finally, click the Copy Now button.

Upon completion, you will be given a Congratulations message and the COBRA software will restart.

If your firewall blocks you from obtaining the update through the software (as described above), you can directly download it by visiting www.cobrasolutions.com/firewall.

1. Click on the “Updating Version 20 when you have a firewall.
2. Follow the instruction on the web page.
3. Under step #3, you will be asked to provide a password for the update.  The current password can be found in the emailed version of this newsletter (right column).
4. Continue to follow the steps followed by entering the COBRA Administration Manager and replace the current letters with the new ones. (If you are a TPA, you may want to update just one group first, following step 5 above.).

Letter Update Verification

If during the update process you received a message stating that “Your documents do not need to be updated,” you can verify that they were or were not updated by following these steps.

Update your Notifications:

1. Start the COBRA Administration Manager (CAM).
2. Select the ‘Notifications’ menu option.
3. Select ‘Check for Newer Letters’.
4. Click the ‘Search’ button.
5. If newer letters are available, they will be displayed in the list box. Select the letters you would like to update and then click the ‘Update’ button (Selecting all the letters is recommended).

Note: If you are a TPA and the above procedure found new letters, you still need to copy the new letters to your other groups. To copy the letters, follow these steps.

1. Select the ‘Notifications’ menu option.
2. Select ‘Copy Letters to Other Groups’
3. Select the letters that need to be updated.
4. Click the ‘Select All’ button to select all of your groups.
5. Click the ‘Copy Letters Now’ button to finish.

Check the Letter
You can also verify that the notices were updated by looking for the heading, “Can I enroll in Medicare instead of COBRA continuation coverage after my group health plan coverage ends?” on page three (3) of the DOL General Notice and the DOL Qualifying Event letter.

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