Medicare 101: A Quick Guide For Employers

Medicare is a governmentfunded health insurance program for those aged 65 and above, those under 65 with certain disabilities, and those with End State Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS). Employers that offer group health insurance plans to their employees have an interest in learning how employees’ entitlement to Medicare benefits can affect the administration of those plans. We sat down to speak with Olivia Childs, a Senior Solutions Licensed Agent at Saxon Financial Services, to get some more information on Medicare for beginners.

When asked about the number one thing to keep in mind when trying to figure out your first steps with Medicare, Olivia commented, “Ask a licensed agent for assistance. Advertisements can be confusing, and everyone wants to make the right choice. Using my expertise, I take the fear out of the decision making, so my clients can make an informed decision concerning their healthcare.”

What are the different parts of Medicare?

  • Part A is hospital insurance that helps cover inpatient care in a hospital, skilled nursing facility care, inpatient care in a skilled nursing facility (not custodial or long-term care), hospice care, and home health care. Most U.S. citizens qualify for zero premium Medicare Part A upon attainment of age 65.
  • Part B is the actual ‘health’ coverage under Medicare. It helps cover physician visits, screenings and other aspects of out-patient medical care. Medicare Part B has a monthly premium to cover outpatient care which increases annually.
  • Part C is a Medicare Advantage Plan. This is a plan that offers all of the benefits of Parts A and B, sometimes with Part D, through a private health insurer.
  • Part D was established in 2003. Part D of the Medicare Program provides prescription drug coverage to Medicare beneficiaries. This drug coverage may be available in a standalone Prescription Drug Plan (PDP) or integrated with a Medicare Advantage Plan.

What is Original Medicare?

With original Medicare, your coverage is through Parts A and B. Part A includes inpatient and/or hospital coverage, while Part B includes outpatient and/or medical coverage. Through this type of Medicare, you are provided a red, white and blue card to show your providers when receiving treatment. While most doctors take Original Medicare coverage, it is important to check whether your provider participates. If you visit one that does,
then your Medicare card will limit how much you can be charged.

Through Original Medicare, you are responsible for a 20% coinsurance if you see a participating provider and after meeting your deductible. Some basic, key things to know about Original Medicare include that:

  • For Medicare Supplement Insurance, you have the choice to pay an additional premium for a Medigap to cover Medicare cost-sharing.
  • You do not need referrals to see a specialist.
  • For drug coverage, you must sign up for a standalone prescription drug plan.
  • It does not cover vision, hearing, or dental services.

What is Medicare Advantage?

Unlike Original Medicare, Medicare Advantage are private plans that contract with the federal government to provide Medicare benefits. These plans are also known as Medicare private health plans or Part C. Some of the most common types of plans are:

  • Health maintenance Organizations (HMOs)
  • Preferred provider Organizations (PPOs)
  • Private Fee-For-Service (PFFS)

If you join a Medicare Advantage Plan, you will not use the red, white, and blue card when you go to the doctor or hospital. Instead, you will use the membership card your plan sends you to get health services covered. Plans must provide the same benefits offered by Original Medicare, but they may apply different rules, costs, and restrictions. They also may offer certain benefits that Medicare does not cover. Just like Original Medicare, there are some key items to be aware of:

  • Your cost-sharing varies depending on plan. Usually pay a copayment for in-network care. Plans may charge a monthly premium in addition to Part B premium.
  • You cannot enroll in a Medigap plan.
  • You can typically only see in-network providers.
  • You will also typically need a referral to see a specialist.
  • For drug coverage, in most cases, the plan provides prescription drug coverage (you may be required to pay higher premium).
  • It may cover additional services, including vision, hearing, and/or dental (additional benefits may increase your premium and/or other out-of-pocket costs).
  • You will have an annual out-of-pocket limit. Plan pays the full cost of your care after you reach the limit.

If you sign up for Original Medicare and later decide you would like to try a Medicare Advantage Plan–or vice versa–be aware that there are certain enrollment periods when you are allowed to make changes.

Employer Requirements

Employers are required to file annual Centers for Medicare and Medicaid Reporting and Employee-Notice Distribution letters even if one employee has coverage under Medicare Parts A, B, or C. Usually companies receive letters from their insurance companies asking for a Federal Tax Identification number and the group size of employees each year.

If your company has 19 or fewer full- and part-time employees, Medicare is almost always primary. Here, it is essential that employees turning 65 enroll in Medicare Parts A and B. If they do not, generally they will have to pay anything that Medicare would have covered. If your company is larger, various rules determine whether your group plan is the primary or secondary payer. MSP requirements also apply for Medicare-eligible employees who are disabled or have end-stage renal disease.

Once per year, written notice distribution is required to all Medicare-eligible employees. This must inform the employee whether the employer’s prescription drug coverage is ‘creditable’ or ‘noncreditable.’ Notice can be sent electronically, but it is often easier to distribute in written format. These need to be sent before October 31.

It is a good idea for employers to provide employees with written details about their employer-provided coverage, which will help them decide how to handle their Medicare choices.

How does it work with COBRA?

COBRA coverage is usually offered when leaving employment; if the employee has COBRA and Medicare coverage, Medicare is the primary payor. If an employee has Medicare Part A only, signs up for COBRA coverage and waits until the COBRA coverage ends to enroll in Medicare Part B, he or she will have to pay a Part B premium penalty.

Employees should be disenrolled in COBRA once they turn 65. A number of Medicare beneficiaries have delayed enrolling in Medicare Part B, thinking that because they are paying for continued health coverage under COBRA, they do not have to enroll in Medicare Part B. COBRA-qualified beneficiaries who have delayed enrollment in Medicare Part B do not qualify for a special enrollment period to enroll in Part B after COBRA coverage ends.

According to the Department of Labor Bureau of Labor and Statistics, the number of workers age 65 and older has increased dramatically since the late 1990s. With that trend expected to continue, companies have an excellent opportunity to assist employees in their health insurance decisions. Navigating the ever-changing Medicare rules can be tricky.

However, with the help of a qualified Medicare specialist, the process can be rewarding for the employer and employees.

Positioning for Long-Term Success

Offering Medicare coverage to your employees can be a daunting, confusing, and tiring task – especially when you go about it alone. While articles like this one can be helpful in understanding what Medicare is, the logistics of actually implementing it as a solution for your employees is a whole other story.

Saxon Financial Advisors creates strategies that are built around you and your vision for the future. The key is to take the first step of reaching out to a professional and then letting us guide you along the path to a confident future. We don’t stop at just a plan. We take the journey with you, reassessing your life situation, changing needs and goals and ensuring that your plan continues to meet your future needs in an ever-changing world. We offer several helpful services to businesses, just like yours, including:

  • Risk Management
  • Tax Planning
  • Education Planning
  • Retirement Planning
  • Estate Planning
  • Business Planning

People are your most valued asset and our greatest reward. Our compassion for people drives us to operate differently, assessing the needs of the population alongside the vision and goals of your organization. At Saxon, we truly listen, engage, understand and advise solutions to help meet your overall company goals. Employee Benefits will have an impact on your organization from recruitment, retention and population wellness to productivity and your bottom line. To us, it isn’t the size of your organization that matters most, but rather the needs of the people within it.

For more information, contact Olivia Childs, a Senior Solutions Licensed Agent, at (513)904-5955 or

About Your Advisor

Olivia Childs is a Senior Solutions Advisor at Saxon Financial. She graduated from the University of Cincinnati with a degree in Organizational Leadership. She was involved in the Human Resources department and a member of HR Succeeds, a mentor program with professionals and students. In her free time, Olivia volunteers at the Cincinnati Epilepsy Foundation. When it comes to helping her clients with Medicare, Olivia pointed out, “Healthcare is personal. I love being a resource for my clients to use to help them make the best decision concerning a Medicare plan.”


Not Connected with or endorsed by the U.S. government or the federal Medicare program.

The demand for data transparency is mounting

Interesting thoughts on transparency data from Employee Benefit Adviser, by Suzy K. Johnson

December 2003 was a great time for health plans in America. This was when high deductible health plans and the underlying health savings accounts were enacted into law by the federal government.

With this law, we were provided the ability to engage employees more directly in the cost of their care with the elimination of copays and Rx cards under these plans.

What many brokers don’t realize is that the law allows anyone to fund the underlying health savings accounts. This means that employers can and should be shown how to use the savings in premiums created by moving to these types of plans to “fund” employees’ health savings accounts. This can result in a win/win for all.

When employers fund the employee’s HSA, they provide the employee the ability to direct additional money into a flex spending type of plan (HSA) that has much higher limits for funding, and allows the same expenses to be reimbursed along with long-term care premiums, COBRA premiums and Medicare Part B expenses. These accounts don’t have the “use it lose it” risk that flex medical reimbursement plans have always included.

A top priority
Now what we need is transparency data from the hospitals and providers. It is my belief that if every American was required to have a high deductible health plan paired with a health savings account only, the demand for transparency data would be palpable and the pressure forced on providers and hospitals to comply would amplify.

Right now the transparency data is not available and this needs to change. If the only plans employers could offer were HDHP plans with HSA accounts and if employers provided funding to help their employees to be able to afford the additional exposure shifted to them, the demand for transparency data would suddenly become top priority and the government would demand it of providers.

Yes, they are more complicated to understand, and yes, the programs require more employee education and hand holding. Nothing good happens when we sit on the sidelines. Let’s commit to becoming part of the solution!

See the original article Here.


Johnson, S. K. (2016 October 4). The demand for data transparency is mounting. [Web blog post]. Retrieved from address

2016 Draft Forms & Instructions Released: Affordable Care Act Reporting Update

Great feature from The National Law Review by Damian A. Myers,

Since our last ACA Reporting Update, the extended deadlines to distribute Forms 1095-B and 1095-C to covered individuals and employees and to file the forms with the IRS have passed.  The IRS has stated, however, that late forms can still be submitted via electronic filing and the forms that received an error message should be corrected.  By many accounts, the first ACA reporting season presented numerous challenges.  From collecting large amounts of data to compiling the forms, to working with service providers that faced their own unique challenges, to facing form rejections and error notifications from an inadequate IRS electronic filing system, employers and coverage providers faced obstacles nearly every step of the way.  Nevertheless, most employers and coverage providers were able to get the forms filed and put the 2015 ACA reporting season behind them.

But, alas, there is no rest for the weary. In late-July, the IRS released new draft 2016 Forms 1094-B and 1095-B (the “B-Series” Forms) and Forms 1094-C and 1095-C (the “C-Series” Forms).  Additionally, on August 1, the IRS released draft instructions to the C-Series Forms (as of the date of this blog, draft instructions for the B-Series Forms have not been released).  For the most part, the 2016 ACA reporting requirements are similar to the 2015 requirements, subject to various revisions described below.

  • Various changes have been made to the forms and instructions to reflect that certain forms of transition relief are no longer applicable. For example, the non-calendar year transition relief (for plan years starting in 2014) that applied in 2015 does not apply in 2016. Similarly, changes have been made to reflect that the “Section 4980H Transition Relief” is still relevant only for non-calendar year plans though the end of the plan year ending in 2016.  The Section 4980H Transition Relief exempts applicable large employers (“ALEs”) with 50-99 full-time employees from penalties under Section 4980H of the Internal Revenue Code (the “Code”) and reduces the 95% threshold to 70% for other ALEs.  The relief also exempts ALEs from having to offer coverage to dependents if certain requirements are met. For calendar year plans, the threshold is at 95% throughout 2016 and dependent coverage must be offered during each month of the year.

  • The draft instructions to the C-Series Forms provide more detail and examples on how ALEs should prepare the forms. Instead of referring to “employers” throughout the instructions, the IRS has replaced that term in most cases with “ALE Member.”  The reason for this change is to highlight the fact that each separate ALE Member must file its own forms. Examples related to completing the authoritative Form 1094-C highlight that each separate entity (determined based on employer identification number) is required to file its own authoritative Form 1094-C.

  • As promised by the IRS last year, there are two new indicator codes for Line 14 of Form 1095-C. These new codes ask employers to indicate whether a conditional offer was made to a spouse. An offer of coverage to a spouse is conditional if it is subject to one or more reasonable, objective conditions. For example, if a spouse must certify that he or she is not eligible for group health coverage through his or her employer, or is not eligible for Medicare, in order to receive an offer of coverage, the offer is considered conditional.

  • The draft instructions to the C-Series Forms reflect that the good faith compliance standard applicable to 2015 forms (under which filers could avoid reporting penalties upon a showing of good faith) no longer applies for 2016 ACA reporting. Going forward, reporting penalties may be waived only upon the standard showing of reasonable cause.

  • The draft instructions to the C-Series Forms include new information related to coding for COBRA continuation coverage. There has been some uncertainty regarding how to treat offers of COBRA continuation coverage since the IRS removed relevant guidance from its Frequently Asked Questions website in February 2016. Similar to the 2015 instructions, the draft 2016 instructions provide that offers of COBRA coverage after termination from employment should be coded with 1H (Line 14) and 2A (Line 16) whether or not the COBRA coverage is elected. The new instructions now state that this coding sequence also applies for other, non-COBRA post-employment coverage, such as retiree coverage, when the former employee was a full-time employee for at least one month of the year.

In the case of an offer of COBRA coverage following a reduction in hours, the basic coding requirement is the same as in 2015 – the offer of COBRA coverage is treated as an offer of coverage on Line 14 of the Form 1095-C. The draft instructions expand on this basic requirement to explain how to code Lines 14 and 16 when the offer of COBRA coverage is not made to a spouse or dependent.  In general, for purposes of Code Section 4980H, an offer of coverage made once per year to an employee and his or her spouse and dependents is treated as an offer for each month of the year even if the coverage is declined for the employee, spouse, and/or dependents.  Under general COBRA rules, only those individuals enrolled in coverage immediately prior to the qualifying event receive an offer of COBRA coverage.

So how does this play out when an employee with a spouse and dependents elects self-only coverage during open enrollment and later loses that coverage due to a reduction in hours? The draft instructions treat the initial offer of coverage at open enrollment and the offer of COBRA coverage as two separate offers of coverage.  To determine the proper coding, the employer must look at who had the opportunity to enroll at each offer.  During open enrollment, the employee, spouse and dependent had the opportunity to enroll.  Thus, until the reduction in hours and loss of coverage, the coding should be 1E (offer to employee, spouse and dependent) in Line 14 and 2C (enrolled in coverage) in Line 15.

In contrast, the offer of COBRA coverage was only available to the employee and, therefore, after the reduction in hours, the coding should be 1B (offer to employee only) in Line 14. If the employee does not elect the COBRA coverage, code 2B (part-time employee) could be inserted in Line 16.  If, however, the employee does elect COBRA coverage, it appears that code 2C (enrolled in coverage) should still be inserted in Line 16.  Although this latter coding sequence is likely intended to protect the spouse and dependents from being “firewalled” from a premium credit, there appears to be nothing to indicate that the employer should not be assessed a penalty for failing to make an offer to the employee’s dependents.

  • The draft instructions for the C-Series Forms provide additional insight into how to calculate the number of full-time employees for purposes of column (b) in Part III of the Form 1094-C. The draft instructions clarify that the determination of full-time employee status is based on rules under Code Section 4980H and related regulations and not on other criteria established by an employer. Note that, currently, the draft instructions state that the monthly measurement period must be used for this purpose, but it appears that this is a mistake and that it should reference both the monthly measurement and look-back measurement methods. The IRS may clarify this in the final instructions.

  • One important non-change in the draft instructions is that the specialized coding for employees subject to the multiemployer plan interim guidance remains in effect for 2016 reporting. The interim guidance provides that an employee is treated as having received an offer of coverage if his or her employer is obligated pursuant to a collective bargaining agreement to contribute to a multiemployer plan on the employee’s behalf, provided that the multiemployer plan coverage is affordable and has minimum value and the plan offers dependent coverage to the eligible employee. The coding for such as employee is 1H (no offer of coverage) for Line 14 and 2E (multiemployer plan interim guidance) for Line 16.

There will undoubtedly be tweaks to the draft instructions to the C-Series forms, but significant changes appear unlikely. Given that only five months remain in 2016, employers should start planning now for 2016 ACA reporting based on the draft instructions and make alterations as necessary when final instructions and other guidance is released.

See the original article Here.


Myers, D. A. (2016 August 4). 2016 draft forms & instructions released: affordable care act reporting update. [Web blog post]. Retrieved from address

What is the real cost of COBRA?

Original post by Chini Krishnan,

Whether you’re a benefit adviser, HR consultant or a broker, it’s important to understand the financial implications of COBRA and alternative solutions. By taking the right approach, you can become a cost-savings hero for both the employer and insured individuals. Here’s what you need to know to help educate your clients about COBRA alternatives that will put money back in everyone’s wallet next year.

While most individuals enrolled in a COBRA plan are keenly aware of the notoriously high expense, most companies don’t realize how much COBRA enrollees actually cost them – roughly 54% more in claims costs than active employees, according to Spencer’s Benefits Report. Here’s the breakdown:

  • The average COBRA enrollee costs employers $11,000 in annual costs (versus $7,204 for the average active worker)
  • Average rate of COBRA uptake by terminated employees: 10%
  • Average recipient stays on COBRA 7.4 months

Why does COBRA cost employers so much? In part because former employees who opt in to COBRA generally do so because they have a pre-existing condition or other health issues, which drives the claims rates and costs up. Self-insured employers are most at risk for high COBRA costs because they cover the entire cost of their employees’ health insurance claims, including COBRA enrollees’ claims.

And, there’s more to consider when looking at COBRA’s bottom line. Having former employees on COBRA leads a company to be considered more of a risk when it comes time for annual renewals, or when shopping around for new plans. In fact, if a company chooses look for a new plan, it will start getting declined by carriers if it has more than 10% of its population on COBRA — the exact percentage of average uptake. So, in the end, having too many people on COBRA can hike up the premiums for active employees, too.

A better bet

Leveraging new opportunities available under the Affordable Care Act, employers and brokers can transition COBRA enrollees to a marketplace plan. This move is a huge win-win for both companies and their former employees. Employers save on the cost of claims, while former employees can save literally thousands of dollars a year compared to the cost of COBRA. Let’s look at the numbers from an enrollee’s perspective based on Kaiser Family Foundation’s 2015 Employer Health Benefits Survey:

  • The average COBRA premium for a family in 2015 is $17,895.90 per year or $1,491.33/month
  • Average individual premium (HHS/ states) before the Advanced Premium Tax Credit (APTC) is $374
  • Average individual premium (HHS/ states) after the APTC is $105
  • Average COBRA premium of $531.33/month

Considering these statistics, marketplace plans have the potential to be 80% less than COBRA.Plus,Centers for Medicare and Medicaid Services recently cited an HHS analysis stating “about eight out of 10 returning consumers will be able to buy a plan with premiums less than $100 dollars a month after tax credits; and about seven out of 10 will have a plan available for less than $75 a month.”

One of the common misconceptions is that marketplace plans don’t hold their own when compared to group insurance. But that’s hardly the case, especially when you consider that, after tax credits, enrollees could even upgrade their plans for the same price as COBRA. With such significant savings possible, it pays to be educated. In this case, what employers don’t know will hurt their bottom line. Don’t miss the window of opportunity to transition COBRA enrollees to the public marketplace.

Chini Krishnan is co-founder & CEO, GetInsured.

How to Avoid ACA Filing Penalties

Originally posted by Michael Weiskirch on August 21, 2015 on

The 6055 and 6056 tax filing has many employers and their advisers up in arms for the upcoming tax filing. The increased penalty amounts announced in July are alarming. A single 1095-C form violation could result in a penalty of $500 per form, with no cap if the employer shows intentional disregard — basically skipping out on the filing for 2015. A 500-person firm in this case would pay $250,000 in penalties. The good news is many employers can get a break of some sort for 2015. These are listed below:

Good faith effort

For 2015, employers who file will have protection even if their filing is incorrect or incomplete, as long as they show they made good faith efforts to comply with the ACA reporting requirements. A “good-faith effort” is defined as employer simply attempting to complete the forms. Keep in mind that the good-faith effort for 2015 tax year will disappear in 2016, thus penalties will apply for incorrect information in subsequent years.

Transition relief

Transition relief is designed to shield employers from shared responsibility penalties for all or part of 2015, reducing the exposure of the (A) $2,000 or (B) $3,000 penalties. This relief is not granted automatically and only applies for the 2015 tax year. To take advantage of this relief, the employer needs to complete line 22 of the 1094-C form or line 16 of the 1095-C for non-calendar year plans. With HCM File, we advise our clients to incorporate transition relief into their filing where appropriate. There are four flavors of transition relief, each essentially providing a bye for the months the relief is designated.

1)      Qualifying offer method: Employer who offers MEC which does not exceed 9.5% of the federal poverty level to at least 95% of full-time employees.
2)      4980H  for Employers with 50-99 Employees: Employer averaged between 50-99 employees
3)      4980H  for 100+ Employers: Employer offered coverage to at least 70% of full-time employees
4)      Non-Calendar Year Relief: Employers with plans that renew February-December in 2015.

30-day extension mirroring

The extension process for W2s and 1099s, the IRS will allow a 30-day extension as long as you can demonstrate certain hardship conditions and file Form 8809 by Jan. 31, 2016. Getting the final health plan participation and completing 1095-C forms for each health eligible employees, COBRA and retirees (if self-funded) is a lot to accomplish in a short window. As many employers scramble to complete their end of year payroll and compile the information for 6055/56, a good number of employers are looking to take advantage of the extension especially in the first year. Unlike the good faith effort and transition relief, the 30-day extension can be utilized in any tax year assuming the employer qualifies.

Also see: "Why get involved in ACA reporting?"

While good faith effort, transition relief and 30-day extensions are tools that employers may take advantage of to shield them from potential penalties, they should not be viewed as a method to evade penalties in all situations. Employers should strive for compliant, accurate and penalty-free filing without the support of any safety nets.

PPACA hasn’t killed COBRA – yet

Originally posted by Gina Binole on

With full implementation of the Affordable Care Act looming – delays in the employer mandate aside – many in the HR world have been wondering whether health care reform will render COBRA obsolete.

The short answer: yes – and no.

While the new law has no direct impact to the Consolidated Omnibus Budget Reconciliation Act, the indirect effects of the Patient Protection and Affordable Care Act could eventually render COBRA meaningless.

COBRA was designed to bridge coverage for employees who lose their job, or lose health coverage through their job. This was deemed necessary because individual policies can be expensive and quite often imposed pre-existing condition exclusions.

The PPACA, however, seeks to sever the link between employment and health care. It does this by prohibiting pre-existing condition exclusions and creating state exchanges where individual coverage is supposed to be available at affordable rates.

Beginning Jan. 1, individuals who lose employer-provided coverage will have the choice of either purchasing COBRA coverage, or purchasing coverage through the exchanges. While COBRA only allows people to elect the coverage in which they were enrolled on the date they lost their job, the exchanges are meant to offer a range of options and coverage levels.

The premium subsidies that will be available to individuals with household incomes up to 400 percent of the federal poverty level also are expected to make purchasing coverage through an exchange more attractive than paying for insurance through COBRA.

But COBRA isn’t going to disappear overnight, if ever.

“Heath care reform is being marketed as a mechanism for enhancing choice in health care options. (Once Obamacare goes into full effect), the option to remain on an employer’s plan is likely to remain a choice, in addition to plans available through the exchanges,” said Iris Tilley, an Oregon-based benefits attorney. “In addition, while COBRA coverage is typically expensive, for some individuals it may remain less expensive than exchange coverage because the cost of exchange coverage correlates directly to an individual’s age, while employer coverage (and in turn COBRA coverage) reflects a broader range of ages.”

Tilley said individuals who suffer a loss of coverage are likely to weigh the plans available through the exchanges against their employer’s plan. For some, COBRA will make sense.

Moreover, employers with a qualified health plan still will be required to provide the opportunity for a person to elect COBRA coverage. Its rules will remain in force. Tilley also noted that the PPACA does not cover dental, vision, Medical Flexible Spending Accounts, Health Reimbursement Accounts or Employee Assistance Plans, which are subject to COBRA regulations.

“There is certainly a perception that the health care exchanges eliminate the need for COBRA since with the health exchanges, individuals will have access to insurance in ways they don’t today. But employers subject to COBRA today will remain subject to COBRA until such time as Congress decided to potentially do away with COBRA,” Mary Jo Davis, Ceridian’s vice president of product management said during a recent podcast.

Davis sought to clear up what she described as a few myths surrounding COBRA and PPACA. First, she said individuals assume health exchanges will be consistent across every state. But the reality is that states will have latitude to design their own coverage. Secondly, she said people are counting on the exchange premiums to be much cheaper than employer-sponsored health care coverage.

“We don’t know that. It could be more expensive,” she said.

Finally, she said people also assume that health care exchanges will be an option for all employees and consumers in 2014. But that is true only for small employers. Depending on the state, that means those with 100 employees or fewer or 50 and fewer.

Individuals also might have met their out-of-pocket deductible costs with their employer, and it would be costly for them to switch to an exchange. Another reason for COBRA to stay relevant might be that people want to stick with existing health care providers.

Other points to consider:

  • One of the qualified events that trigger the need for a COBRA notice is a dependent losing eligibility under the health plan. Now that the age for dependents to lose coverage has been extended to age 26 under PPACA, it is possible that an adult dependent can continue for an additional 36 months under COBRA or until age 29 on the employer’s health plan.
  • Under PPACA, waiting periods for coverage will be no more than 90 days. This means former employees may not need COBRA coverage for as long as in the past. However, depending on the viability and quality of health plans offered through the state exchanges, it might make more sense for a former employee to elect COBRA coverage if it looks like they will have more than a three-month gap in coverage during the year that could result in a penalty under the individual mandate.



Benefit Aspects of Employee Leaves of Absence

Employee leaves of absence raise a number of difficult questions under federal employment laws.  Must a requested leave be granted?  Under what conditions?  Must the employee's position be held open so that the employee may return to it after the leave?

In addition to those questions, employers often must address the benefits-related aspects of any leave of absence. Complicating a benefits manager's task are a host of federal laws, including the Family and Medical Leave Act, COBRA and more.

Learn what you need to know to cope with leave-related challenges from your workforce. Please contact us for more information.