• COBRA and Retiree Administration

    As you likely know, the Consolidated Omnibus Budget Reconciliation ACT (COBRA) introduced a fair and equitable plan of insurance for employees and dependents who no longer qualify under the group health plan coverage. COBRA allows an extension of coverage for 18-36 months. But did you know PacificSource Administrators (PSA) can help you with your COBRA and retiree administration?

    Who should offer COBRA? 

    • COBRA is required for groups that had 20 or more full-time equivalent employees in the previous calendar year.
    • COBRA applies to plans in the private sector and those sponsored by state and local governments. The law does not apply to plans sponsored by the Federal government and certain church-related organizations. 
    • COBRA applies to health, dental, vision, health flexible spending account (Health FSA), and health reimbursement arrangement (HRA) plans.

    How can PacificSource Administrators help you? 

    • As a third-party administrator, PSA ensures companies follow COBRA-specific regulations.  
    • PSA keeps track of the necessary notifications and time periods. 
      • A group has 30 days to inform us of a new plan member; we then have 30 days to ensure the COBRA General Rights Notice is mailed to the member.
      • A group has 30 days to notify us of a qualifying event (QE) of change; we then have 14 days to send out the COBRA Specific Rights Notice Letter to the member.
    • PSA sends COBRA payment coupons to members with their initial enrollment packet. 
      • PSA is responsible for collecting member premiums and passing the premiums to carriers or self-funded groups.
      • Members may mail a check or money order to PacificSource Administrators. After initial payment, members may also sign up for a monthly automatic withdrawal from their checking or savings account.
      • Members may also make their premium payments online via our COBRA web portal. The member will incur a $20 processing fee for online payments. 
    • Members have access to their information online, 24 hours a day, with our secure COBRA web portal. And there are multiple options for paying their premiums.
    • PSA also provides COBRA administrative services for retirees. Retiree services are intended to fill the gap for those employees who have taken an early retirement from their employer until they meet the Medicare eligibility age requirements.  

      Note: Once an employee reaches the Medicare eligibility age requirements, they are no longer eligible to participate in either the COBRA or Retiree plans. However, if an employee has already met the Medicare eligibility age requirement at the time of their qualifying event, they are eligible to participate in COBRA. For example, a member who is age 66 at the time they have a qualifying event is eligible for COBRA.

      If you would like more information about COBRA and retiree services, contact your PacificSource Administrators Client Service Representative.