This article explains the Consolidated Omnibus Budget Reconciliation Act (COBRA) and how PEO employees can access this.
What is COBRA?
COBRA is a way for US employees to continue their health coverage even after they are no longer employed with their employer. If they leave their employer, they can choose to pay for their health coverage out of pocket for up to 18 months via COBRA.
As COBRA is a continuation of healthcare benefits, there is typically no change to the employee’s member or subscriber ID for the healthcare carrier. Once COBRA is set up and the extension is in place, the carrier’s system will reflect the updated coverage dates.
How to enroll into COBRA
COBRA information will automatically be sent out via regular mail to the employee within 10 business days of the termination. This will be sent by our COBRA vendor, ThrivePass. The employee will have a period of time to decide if they would like to enroll in this coverage and the plan would backdate to the 1st, if needed.
Monthly payments are made directly to Thrivepass. If the payment is not received by the due date each month, coverage will be automatically terminated. Instructions on how to make these payments are included in the packet.
Employees will receive a packet physically mailed to their address on file usually within 10 business days from the time the request has been made. The packet includes instructions on how to complete the election form and submit manually, and the employee is given a unique code to register online with Thrivepass to enroll, make payments and manage their COBRA electronically. Since this code is unique to the employee, the employee will need to wait until the packet is generated in order to access the online registration and other enrolment options.
Frequently Asked Questions
[ACCORDION] If I do not enroll for COBRA, how long do I have health benefits?
Employees have fully active coverage until the end of the month following their final day of employment. For example, if the employee is terminated on January 17, the employee will continue to have health benefits until January 31, even if they do not enroll in COBRA.
[ACCORDION] Can I get a digital COBRA packet while waiting for it in the physical mail?
If you do not receive your packet within 10 days after your last working day, please contact Deel. In urgent situations a digital packet may be issued.
[ACCORDION] What do I do if I need care (emergency or non-emergency) and I don’t have a physical or digital COBRA card yet?
If the employee has successfully enrolled into COBRA, their healthcare benefits are extended from their final date of employment until the date they have indicated on the COBRA application. The employee will have the same benefits they had before their termination date, even if they do not have the physical card or digital card yet. If the emergency or non-emergency service falls within the same month of termination, there is no need to show proof of COBRA as the same benefit the employee had pre-termination will still be active. If the emergency or non-emergency service falls after the month of termination, the employee will need to show proof of COBRA. If the employee does not have their card at this time, they may need to pay for the care upfront and then claim a reimbursement with their carrier afterwards.
[ACCORDION] Can the employee apply for COBRA after their final day of employment?
The employee has 60 days from the date of termination to enroll in COBRA and make the appropriate payments. The plan will backdate coverage to the 1st of the month following their date of termination if needed.
[ACCORDION] Is there a maximum number of months that an employee can request for COBRA?
Employees can request COBRA for a maximum of 18 months.