COBRA ADMINISTRATION SERVICES Client Guide

Transcription

1 COBRA ADMINISTRATION SERVICES Client Guide JULY 2012 This Client Guide contains a summary of COBRA Continuation Coverage and is not intended to provide legal or tax advice. Please consult with your legal or tax advisor for specific legal and/or tax advice with respect to your obligations under COBRA. Page 1 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc KNOWLEDGE INNOVATION PERFORMANCE VALUE

2 TABLE OF CONTENTS Section 1: Welcome New Client Set-up Checklist Welcome Letter AmeriHealth Administrators COBRA Contact Information Section 2: COBRA Overview What is COBRA? Who It Affects Non-Compliance Penalties Qualified Beneficiaries Qualifying Events COBRA Extension Timing and Termination of COBRA Benefits Section 3: Establishing COBRA Administration Services New Client Set Up QB Election Section 4: Additional Billing Considerations Severance Agreements Mid-Year Premium Increases Plan Changes Section 5: What to Do When a Plan Member has a Qualifying Event (QE) COBRA Notification Procedures Notices Obligations for the Employer / AmeriHealth Administrators / COBRA Participant COBRA Premium Payments Paying Monthly Premiums Section 6: Using AmeriHealth Administrators Online COBRA Tools Entering and viewing COBRA Data Online Qualifying Beneficiary Add Wizard Reporting Engine: Existing Templates and Creating Ad-Hoc Reports Qualifying Beneficiary Access Section 7: Monthly Reports COBRA Administration Monthly Invoice COBRA Administration Standard Reporting Monthly Activity Summary / Voucher Report Primary Qualified Beneficiaries (PQB) Listing Notification Letter Issued Report Appendix: Sample Forms and Letters Page 2 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

3 1 NEW CLIENT SET-UP CHECKLIST WELCOME To ensure your group s set-up process with AmeriHealth Administrators (AHA) proceeds smoothly, we ve prepared the following simple checklist for your benefit: Review, complete, sign and return the Administrative Services Acknowledgement and Authorization or COBRA Administrative Services & Fees schedule to AmeriHealth Administrators. A copy of the signed agreement will be returned to you. Complete and sign the HIPAA Group Health Plan Designated Contact Form providing both your group s main contact and primary finance contact for the account (if different), and return to AmeriHealth Administrators. Complete information on COBRA/Retiree New Client Implementation Form and Rate Sheet, including the contact information for previous COBRA administrator and any outside carriers (if applicable). If yours is a self-funded account, you must include all COBRA-equivalent rates. Confirm the effective date for the AHA administration takeover (date is indicated on the Administrative Services Acknowledgement and Authorization or COBRA Administrative Services & Fees schedule). Compile information regarding existing COBRA participants on the Required Data for Existing Qualified Beneficiaries Enrolled/Pending form and back to AHA so we can enter these participants into our system. Each existing primary participant will receive a welcome letter and set of payment coupons from us. Send a letter to your existing COBRA participants (pending and enrolled) letting them know that AHA will be their new COBRA administrator and the effective date. Our address for future payments should also be included. (Contact your representative if you would like us to provide you with a sample letter.) Be sure to call your account representative if you have any questions. We will also be in contact with you to complete these items and the overall transition. Thank you and welcome to AHA! Page 3 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

4 WELCOME Dear COBRA Administration Client: We are pleased to provide a copy of our COBRA Administration Services Client Guide to you as a new AmeriHealth Administrators COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1986) and billing administration client. We pride ourselves in providing quality service and in treating all customers as valued customers. By choosing AmeriHealth Administrators, your administration of COBRA will be simple. We take care of the communication, documentation, and record-keeping processes to help keep you in compliance, making the complicated task of COBRA administration as simple as possible. This guide explains the compliance systems and procedures designed to help make the complicated task of COBRA administration as simple as possible. You will find samples of the monthly reports and administrative procedures as well as other important information related to the COBRA processes. Please call your AmeriHealth Administrators representative with any questions or concerns about COBRA. Respectfully, AmeriHealth Administrators AMERIHEALTH ADMINISTRATORS CONTACT INFORMATION AHA COBRA CUSTOMER SERVICE Members: Toll-free Customer Service number: BenefitsOutsourcing@ahatpa.com Hours of operation: Monday through Friday, 9am 5pm ET PARTICIPANT PREMIUMS PAYMENT ADDRESS AmeriHealth Administrators PO Box Philadelphia, PA AHA ACCOUNTING DEPARTMENT Bryan Baker, Billing Analyst Phone: bryan.baker@ahatpa.com ALL OTHER CORRESPONDENCE AmeriHealth Administrators PO Box 990 Horsham, PA BenefitsOutsourcing@ahatpa.com ELIGIBILITY AND CLAIMS QUESTIONS Participants must contact the customer service phone number provided on their ID card. Page 4 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

5 2WHAT IS COBRA? The Consolidated Omnibus Budget Reconciliation Act (COBRA), signed into law in 1986, requires most employers who sponsor group health plans to offer their employees and their eligible dependents continuation coverage at group rates. Title 10 of COBRA amends the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code, and the Public Health Service Act for purposes of health plan coverage. Employers offering group health plans have a legal obligation to notify their employees of the right to continue coverage if a qualifying event under COBRA occurs. The Plan must provide covered employees and their eligible dependents with certain notices explaining their COBRA rights. They must also have rules for how COBRA continuation coverage is offered, how qualified beneficiaries (QBs) may elect continuation coverage, and when or how it can be terminated. WHO DOES COBRA AFFECT? COBRA requires that most employers who sponsor group health plans offer qualified beneficiaries (for example, employees and their eligible dependent spouse and children) the opportunity to continue coverage at group rates in circumstances in which group coverage would normally end. More specifically, that means group health plans sponsored by an employer who employs 20 1 or more employees (including part-time workers) on 50 percent or more of the employer s working days during the preceding calendar year. This includes corporations, partnerships, tax-exempt organizations, and state and local governments, although plans sponsored by the federal government and many religious plans are exempt from COBRA. WHAT GROUP HEALTH PLANS ARE SUBJECT TO COBRA? Any group health plan that is maintained or contributed to by an employer or union-sponsored plan to provide any type of health care benefit to employees, former employees, or the eligible dependents of such employees or former employees are subject to COBRA. That includes: traditional indemnity plans HMOs and PPOs specialty plans such as dental, vision, and prescription drug plans health care Flexible Spending Accounts (which meet certain requirements) Life insurance or other death benefits are not considered medical benefits and are not subject to COBRA. In addition, short and long term disability insurance are not considered subject to COBRA provided the insurance constitutes income replacement. DO EMPLOYERS HAVE TO PAY ANY PORTION OF THE COBRA PREMIUM? No, there is no requirement for an employer contribution to COBRA coverage. The entire amount of the insurance premium, plus a 2% administrative fee, may be charged to the qualified beneficiary. ARE THERE FINES OR PENALTIES FOR NON-COMPLIANCE? COBRA OVERVIEW Yes, and they can be significant. The IRS places an excise tax on the employer of $100 or more per occurence per day for non-compliance of COBRA regulations. The Department of Labor can also penalize an employer up to $110 per day per beneficiary for non-compliance. 1. Employers must count all employees regardless of whether they have insurance coverage. In other words, employers must include full-time and part-time employees, as well as seasonal and those working in foreign countries, when determining if they have 20 or more employees. Page 5 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

6 COBRA OVERVIEW QUALIFIED BENEFICIARIES The decision to continue group health coverage may be made by the employee only. An individual eligible for COBRA is known as a Qualified Beneficiary (QB). A QB is an individual who was covered by a group health plan on the day before the coverage is lost due to a qualifying event. The QB is responsible for paying the COBRA premium. Qualified beneficiaries can include some or all of the following: an employee an employee s spouse (and in certain cases, former spouse) the employee s dependent children dependent children born to (or adopted by) the employee while covered under COBRA In other words, a terminating employee covering his/her eligible dependents under the group plan on the day coverage is lost may elect to continue coverage for himself and all eligible dependents, himself only, his spouse only, his dependent child(ren), or in some other combination. For example, a spouse who will lose coverage may choose to elect COBRA continuation coverage even if the terminating employee elects to waive coverage for himself/herself. REQUIREMENTS FOR PLAN ADMINISTRATOR COBRA regulations place the following requirements on you as the Plan Administrator: Coverage must be identical to the coverage provided to similarly situated non-cobra beneficiaries under the group health plan. Any rate or other plan change you offer to your regular employee population (usually during your annual open enrollment) must also be extended to QBs; Your actions must comply with COBRA laws/regulations. WHAT IS A QUALIFYING EVENT (QE)? Events that trigger the offering of COBRA are known as Qualifying Events (QE). There are several types of qualifying events that would make employees, their spouses and dependent children eligible for COBRA continuation benefits. Voluntary or involuntary termination of employment 2 for any reason other than gross misconduct ; Reduction in hours worked 3 which result in the loss of health coverage; Entitlement to Medicare 4 benefits; Qualifying events for a covered employee s spouse or dependent children are: death of the employee termination of the employee s employment (except for gross misconduct) reduction in employee s employment hours, voluntarily or involuntarily divorce or legal separation employee becomes entitled to Medicare; and Dependent children may also become eligible for COBRA due to reaching the maximum dependent age of 26 (up to 30 in some states). Depending on the type of QE 5, COBRA continuation period may be18, 29, or 36 months. 2. A member s voluntary disenrollment from the Plan is not a QE. 3. An employee who goes from full time to part time status, but remains covered under the group health plan as a part time employee, does not incur a Qualifying Event (reduction in hours) as he/she has not lost coverage. 4. Medicare entitlement is not a 36-month qualifying event or secondary qualifying event with respect to the employer s spouse and children unless the employee s Medicare entitlement causes the family members to lose health coverage under the active group health plan in the absence of COBRA coverage. 5. Coverage for employees who are retiring can be processed as QEs as well Page 6 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

7 COBRA OVERVIEW QUALIFYING EVENT Employee s involuntary termination of employment (except due to gross misconduct) Layoff or reduction of hours Death of covered employee/retiree Employee s resignation Employee/retiree Medicare entitlement Divorce/legal separation QUALIFIED BENEFICIARIES Employee, Spouse, Dependent Child Employee, Spouse, Dependent Child Spouse, Dependent Child Employee, Spouse, Dependent Child Spouse, Dependent Child Spouse, Dependent Child ELIGIBLE PERIOD 18 months 18 months 36 months 18 months 36 months 4 36 months Child s dependent status changes Dependent Child 36 months Disability/extension (as determined by Social Security Administration) on the date of the qualifying event or within 60 days after COBRA coverage begins Employee s Retirement 5 Employee, Spouse, Dependent Child Employee, Spouse, Dependent Child 18 or 29 months (see DISABILITY EXTENSION below for more information) 18 months DISABILITY EXTENSION An 11-month extension of COBRA continuation coverage may be available if any Qualified Beneficiaries are disabled, and if the following criteria are met: The Social Security Administration (SSA) must determine that the Qualified Beneficiary was disabled prior to or within the first 60 days of continuation coverage; and, The QB must notify the plan administrator of that fact within 60 days of the SSA s determination; and before the end of the first 18 months of continuation coverage. All of the Qualified Beneficiaries who elect continuation coverage will be entitled to the 11-month disability extension if one of them qualifies. If the QB is determined by SSA to no longer be disabled, notify the plan administrator of that fact within 30 days of SSA s determination. If the individual entitled to the disability extension has non-disabled family members who are entitled to COBRA continuation coverage, those non-disabled family members are also entitled to the 11-month disability extension to a maximum of 29 months. Page 7 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

8 COBRA OVERVIEW WHAT HAPPENS IN THE CASE OF A SECOND QUALIFYING EVENT? An 18-month extension of COBRA continuation coverage may be available to spouses and dependent children who elect continuation coverage if an eligible Second Qualifying event occurs during the first 18-months of continuation coverage. The maximum amount of continuation coverage available when an eligible Second Qualifying event occurs is 36 months from the original Qualifying Event. Second Qualifying Events include: the death of a covered employee; divorce or legal separation from the covered employee; a dependent child s ceasing to be eligible for coverage as a dependent under the group health plan. WHEN COBRA COVERAGE CAN BE TERMINATED The Employer may terminate COBRA coverage if any of the following occurs: 60-DAY ELECTION PERIOD: Qualified Beneficiaries are provided at least 60 days notice (from the date of the Qualifying Event Notice or the loss of coverage, whichever is later) to decide if they want to elect COBRA continuation coverage. If an election form is not received within the 60- day election period, the employer is not required to enroll the employee under COBRA. Group health plans may choose to offer an election period longer than 60 days; however, before extending the election period beyond the statutory minimum, an employer should seek approval from their insurance carrier(s). 45-DAY ENROLLMENT PREMIUM PAYMENT: Qualified Beneficiaries who timely elect COBRA continuation coverage within the 60 days are not required to remit payment for an additional 45 days from the date the enrollment form is signed. If the initial premium payment is not received within that 45-day period, the employer may terminate COBRA continuation coverage. 30-DAY GRACE PERIOD FOR PREMIUM PAYMENTS: Upon timely receipt of both a completed enrollment form and the initial premium, a Qualified Beneficiary is considered enrolled and must be provided a 30-day grace period each month for monthly premium payments. In the event the monthly premium is not received within the 30-day grace period, the employer may terminate coverage. 18-, 29-, or 36-MONTH COBRA ELIGIBILITY PERIOD: Employers may terminate coverage at the end of the 18-, 29- or 36-month COBRA eligibility period. Finally, should an employer no longer provide any health plan coverage for all active employees, they may terminate COBRA continuation coverage also, provided there is no continued coverage available through any parent or subsidiary company. COBRA CONTINUATION COVERAGE CAN REMAIN IN EFFECT UNTIL The end of the 18-, 29-, or 36-month COBRA continuation coverage period The employer no longer provides any group health plan The qualified beneficiary fails to timely pay a premium The qualified beneficiary becomes entitled to Medicare (unless he or she became entitled to Medicare prior to the qualifying event) The qualified beneficiary becomes covered by another group health plan 6 For a divorced or separated spouse he or she remarries and enrolls in the new spouse s plan 7 6,7. If the beneficiary s new group health plan limits or excludes benefits for pre-existing conditions, that plan must credit the beneficiary s period of continuous coverage toward the plan s pre-existing condition waiting period. Page 8 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

9 COBRA OVERVIEW If a qualified spouse or dependent child elects to continue coverage and incurs additional qualifying events while his or her COBRA coverage is in effect, the COBRA continuation coverage is limited to a maximum of 36 months, regardless of the number of qualifying events. Page 9 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

10 3 ESTABLISHING COBRA ADMIN SERVICES FOR QUALIFIED BENEFICIARIES ESTABLISHING COBRA ADMINISTRATION SERVICES FOR QUALIFIED BENEFICIARIES (QBs) AmeriHealth Administrators is hands-on, overseeing many of the procedures to help keep your plan in compliance. Once you contract with AmeriHealth Administrators to administer COBRA coverage for your group health plan, there are certain procedures and forms which need to be completed to ensure that COBRA coverage is implemented in the required timeframe. Your AmeriHealth Administrators representative will let you know what information is needed and will provide you with the forms to be completed and returned either electronically or by paper. NEW CLIENT SET UP Implementation will begin once AmeriHealth Administrators receives the completed required forms. Acknowledgement and Authorization or COBRA Administrative Services & Fees Schedule COBRA/Retiree New Client Implementation Form Required Data for Existing Qualified Beneficiaries (QBs) Enrolled/Pending The COBRA/Retiree New Client Implementation Form concisely captures the information needed to set up services for new COBRA administration clients. If you prefer, you may use the AHA COBRA Enrollment Spreadsheet or follow the directions found on the AmeriHealth Administrators COBRA Enrollment Data Requirements sheet to be sure that all of the information requested is provided in the proper timeframe, days prior to the effective date. Your AmeriHealth Administrators representative can provide you with a Completing the AHA COBRA/Retiree New Client Implementation Form direction sheet or help guide you in properly completing the form. QB ELECTION OF COBRA Once a notification is sent to the Qualified Beneficiary, they may elect to continue some or all of their benefits through COBRA. In order to elect benefits, the QB must complete the form included with the QE Notification and return it within 60 days from the later of the termination date or the date of the COBRA notification. The QB has the option to take an additional 45 days to pay, but when payment Page 10 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

11 ESTABLISHING COBRA ADMIN SERVICES FOR QUALIFIED BENEFICIARIES is sent, it must include all premiums due from the date of the Qualifying Event through the end of the current premium month. At this point, AmeriHealth Administrators will update the QB in our system and contact the appropriate carrier(s) on your behalf to enroll under COBRA continuation coverage. If the QB returns the enrollment form with less than the total payment due or none at all, AHA will respond that we have received the enrollment form but COBRA will not commence unless payment in full is received within 45 days. Due to the fact that there may be some length of time between when a Qualifying Event occurs, when AmeriHealth Administrators is informed, and then AHA processes and sends rhe QE Notice, it is possible that Qualified Beneficiaries may experience interruptions in coverage. AHA does make every effort to contact your insurance carrier within 7 10 business days after a completed election form is received in order to minimize this disruption in coverage. Page 11 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

12 ADDITIONAL BILLING CONSIDERATIONS 4In addition to providing AHA with information regarding QBs for the General and Qualified Event Notices, the employer should also keep AHA informed of the following: SEVERANCE AGREEMENTS In the event of a severance agreement that includes COBRA continuation coverage health benefits, the QE information should be provided to AHA in exactly the same way as with any other situation. Please note that the Qualifying Event date will still be the actual date that the QE occurred (e.g. date of termination). It is recommended that the employer terminate the participant with the carriers just as they would for any other QB. AmeriHealth Administrators will notify the participant in the same manner so that an enrollment form must still be filled out by the QB in order for COBRA, and the severance, to begin. It is important, however, that if a severance agreement does include COBRA continuation coverage, the employer must communicate the relevant terms of the severance agreement (including benefits affected, amount and duration of severance) to AHA in writing. Once the participant elects COBRA, AHA will forward the enrollment form to the insurance company to reinstate the participant back onto the group health plan and their premium payments will be reduced according to the terms of the severance agreement. (Sample severance letter language can be found in the Appendix.) MID-YEAR PREMIUM INCREASES Once a Qualified Beneficiary elects COBRA continuation coverage, he or she can be required to pay premium increases under certain circumstances. In the event a new plan year starts and the applicable premium increases for active employees, the new rate can be charged by the employer to the Qualified Beneficiary. It is the responsibility of the employer to communicate any rate changes to AmeriHealth Administrators. This will allow AHA to generate new premium payment slips for all affected COBRA participants. These rates should be communicated at least 30 days prior to the change. Under COBRA regulations, Qualified Beneficiaries may not be required to pay rate increases more than one time in a 12-month period. PLAN CHANGES If an employer decides to change insurance carriers at any time, this information must be communicated immediately to AmeriHealth Administrators. It is also the responsibility of the employer to send open enrollment information to all eligible COBRA continuation participants in the event of a group health plan change or the introduction of a new plan sponsor. Page 12 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

13 WHAT TO DO WHEN A PLAN MEMBER HAS A QUALIFYING EVENT 5COBRA NOTIFICATION PROCEDURES EVENT Qualifying Event (QE) occurs TIMELINE AmeriHealth Administrators must be notified within 30 days of QE Qualifying Event Notice sent to qualified beneficiary (QB) AmeriHealth Administrators provides election notice to QB within 14 days of QE notification COBRA Election period Once notified, QB has 60 days to elect or waive COBRA continuation coverage AmeriHealth Administrators mails premium billing statement and payment slips Upon receipt of QB election of COBRA Premiums collected from QB Activity reports provided to employer Monthly End of COBRA Eligibility Notice sent 90 days prior to the end of qualified beneficiary s COBRA eligibility period NOTICES The Group Health Plan is responsible for sending all notifications to qualified beneficiaries. There are two types of NOTICES that must be provided the Department of Labor General Notice and the notice upon the occurrence of a qualifying event. COBRA General Notice 1 COBRA provides that the Group Health Plan the employer is responsible for providing a notice of COBRA rights. The General Notice, often overlooked, must be given to an employee (and spouse if applicable) when first covered under the group health plan. It should be provided either at the time of hire or within 90 days of when an employee becomes eligible for the employer s group health benefits. This notice is a brief document which outlines the employee s future rights and obligations should they lose coverage due to a qualifying event, and must be provided in written form. 1. AmeriHealth Administrators can send these notices if requested (additional fees apply). Via First Class mail, AHA can address and send* the General Notice to the employee and eligible dependents which means that the spouse or other covered dependents have the right to open that piece of mail. AHA requires the following information in order to generate and mail a General Notice: Employee s Name & Address Date of Birth Social Security Number or Employee Number Hire Date Benefit Coverage Start Date This information may be provided to AHA via a spreadsheet, , or via a template provided by AHA. * NOTE: Simply handing the General Notice to an employee who also has covered dependents does not fulfill the employer s obligation because it does not ensure that the dependents will have an opportunity to read the document. Page 13 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

14 The Qualifying Event (QE) Notice WHAT TO DO WHEN A PLAN MEMBER HAS A QUALIFYING EVENT COBRA provides that the plan administrator/employer must give written notice of COBRA rights a second time at the time a qualifying event occurs. The Qualifying Event Notice is a lengthy document which outlines the QB s rights under COBRA to elect coverage, explains the deadlines for election, lists the benefits available along with their monthly premiums and provides a COBRA enrollment form. The Department of Labor takes the position that the Plan Administrator (employer) is responsible for providing the second notice, and liable for failure to do so, even in the event the Plan Administrator delegates the responsibility to another person or entity. When an employee experiences a qualifying event, notify both your applicable insurance carrier and our COBRA unit electronically within 45 days of the QE. Inform AmeriHealth Administrators using the Required Data for Existing Qualified Beneficiaries Enrolled/Pending, AHA COBRA Enrollment Spreadsheet, COBRA Information Sheet or other method agreed upon with your representative. Please be sure to include all required QE information as noted on the AmeriHealth Administrators COBRA Enrollment Data Requirements sheet. Each piece of information has a particular importance with relation to compliance of both COBRA and HIPAA regulations. AHA reserves the right to return data sheets not completed in their entirety, which may delay the process of notifying the qualified beneficiary. EMPLOYER OBLIGATIONS The employee and his/her eligible dependents must be notified of their rights under COBRA within 45 days after the qualifying event. Using the online COBRA tools (see Section 6), the Employer must also let AmeriHealth Administrators COBRA department know: if participants experience a qualifying event (within 30 days of the QE); if you receive word of some COBRA-qualifying activity (divorce, etc.) that requires a response. Unless you have separately contracted for AmeriHealth Administrators to provide the service, it is the Employer s obligation to send the General Notice of COBRA Rights (Department of Labor notification) to all of your employees and their dependents within the first 90 days of coverage. AMERIHEALTH ADMINISTRATORS OBLIGATIONS Our COBRA department will contact, inform, bill, collect, and respond to all inquiries from Qualified Beneficiaries and COBRA participants. The Qualified Beneficiary data received from the Employer is loaded into the COBRA system. The election notice is created and mailed to the member within 14 days. AmeriHealth Administrators maintains proof that it was mailed. NOTE: once a qualifying event occurs, employees and/or their dependents must be provided a Qualifying Event Notice to the last known address containing required information about premiums, due dates, how long coverage may last, when coverage may be terminated, etc. Monitor 60-day election period. Answer all participant questions regarding completion of the election form and the election period. A premium billing invoice with payment slips is mailed to the member. Collect premiums each month from the participants. Monitor 45-day period for initial payment and subsequent 30-day grace period for premium Page 14 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

15 WHAT TO DO WHEN A PLAN MEMBER HAS A QUALIFYING EVENT payments. Send cancellation notices to members who do not pay the billed monthly premium amount within the grace period. Disburse collected premiums to appropriate parties, along with monthly reporting package (detail of monies collected for participants). Qualified Beneficiaries premium payments are posted to the system within 2 3 business days. AmeriHealth Administrators will send a letter to Qualified Beneficiaries 90 days prior to the end of their COBRA eligibility period. Send monthly reports to Employer noting member elections, premium and overpayments received, active listings, and coverages cancelled. Provide ongoing customer service to Qualified Beneficiaries and employers. Notify Qualified Beneficiaries of premium shortages/overages. Notify Qualified Beneficiaries of termination of COBRA continuation coverage due to nonpayment of premium, voluntary withdrawal, end of eligibility, etc. (Notice of Termination of Continuation Coverage). Notify participant if COBRA continuation coverage has been denied (Notice of Unavailability of Continuation Coverage). Monitor Medicare Entitlement and terminate coverage, if applicable. Provide requested printouts to participants upon request, such as payment history reports or copies of notices. Provide rate change notice and new invoices to Qualified Beneficiaries. Process change in status requests (family to single coverage, plan changes, address changes, etc.). Conversion Notice must be given within last 180 days of COBRA coverage. This is provided by AHA at 90 days prior to the end of a participant s COBRA period. Termination Notice must be provided to Qualified Beneficiaries upon termination of COBRA. PARTICIPANT OBLIGATIONS As part of the services we provide to our employers, we ask that all QB inquiries relating to COBRA be referred directly to AmeriHealth Administrators. If a Qualified Beneficiary decides to enroll under COBRA, they will be responsible for forwarding all correspondence and payments directly to AHA. Note: It is the responsibility of the COBRA participant to notify both the insurance carrier and AHA directly of their addition of any newborn child, adoption, or change of address. Covered employees and qualified beneficiaries are responsible for: timely election of COBRA continuation coverage sending notice of COBRA election to AmeriHealth Administrators timely payment 2 of premiums (in full) mailing monthly premium coupon and payment to AmeriHealth Administrators Participants must notify 3 AmeriHealth Administrators within 60 days of the following of circumstances that could cause cancellation of coverage: divorce legal separation dependent ceasing to be a dependent change of address. 2. Any premium payments received after the 30-day grace period will be returned and COBRA coverage will be terminated. In the case of insufficient funds (NSF), the continuant will be notified of the NSF, assessed a fee, and given an opportunity to make acceptable payment within a defined number of days. 3. The QB s notice does not have to be in writing. Page 15 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

16 WHAT TO DO WHEN A PLAN MEMBER HAS A QUALIFYING EVENT COBRA PREMIUM PAYMENTS Calculating the COBRA Premium COBRA does not require employers to pay for continuation coverage. Employers are permitted to charge employees 100% of the cost of the group health plan plus an additional 2% (for a total of 102% of the plan premium). In the event that a COBRA participant qualifies for a disability extension (additional 11 months), the IRS allows for the insurance carrier to charge a maximum of 150% of the premium during the 11 months of the extension. Late Premium Payments The initial premium payment must be made within 45 days of the date of COBRA election. The employer or plan administrator must give a 30 day grace period from the monthly due date for subsequent premium payments. AmeriHealth Administrators will automatically terminate any Qualified Beneficiary whose payment is postmarked after 30 days of the due date. Effect of Nonpayment of Premium A COBRA Qualified Beneficiary who fails to make payment by the last day of the grace period will cause COBRA coverage to be terminated retroactively to the first day of the period for which premiums were due. For example, if a COBRA payment due on June 1st is not postmarked by June 30th (end of the 30-day grace period), then COBRA coverage may be terminated retroactively to June 1st. It is recommended that employers and plan administrators clearly indicate that a failure to pay premiums in a timely manner will result in a loss of coverage retroactive to the date through which premiums were last paid. PAYING MONTHLY PREMIUMS The initial mailing sent to employees who elect COBRA coverage include preprinted monthly payment slips which the participant will need to return with his or her monthly premium payment. It should be noted that our correspondence to the participants indicates that payments should be received 4 by the 1st of the month to avoid coverage interruptions. However, due to the 30-day mandatory grace period extended by the Internal Revenue Service, many participants send payments late in the month for which they are due. Due to this fact, AHA cannot guarantee that coverage will not be interrupted due to late payments. COBRA premiums are always due on the first day of the month for which they cover. In addition, 4. There are no statutory or regulatory guidelines under COBRA indicating who may or may not pay for COBRA premiums. AmeriHealth Administrators can accept premium payments from a third party. Plan documents and COBRA notices should clearly state what information should accompany a premium payment made by a third party. For example, the continuant s name and social security number should be written on the check stub of a third party payer in order to avoid confusion. Page 16 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

17 COBRA continuants are permitted a 30-day grace period in which to post their premiums before they are considered delinquent. To avoid timing-based service interruptions, many employers choose to pay all COBRA participant premiums to the insurance providers when they are due and then take a credit retroactively if a qualified beneficiary has not made a payment. In other words, if the employer pays their June premium on or about June 1st, the COBRA premiums for the month of June from AmeriHealth Administrators won t be received until early July. To avoid member coverage interruptions and eligibility problems, employers pay the full June premiums and then take a credit for any participants who did not pay for June on the July bill. AmeriHealth Administrators will accept COBRA premiums received in our office postmarked up through the 30-day grace period. WHAT TO DO WHEN A PLAN MEMBER HAS A QUALIFYING EVENT Page 17 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

18 6 ENTERING AND VIEWING COBRA DATA ONLINE USING AMERIHEALTH ADMINISTRATORS ONLINE COBRA TOOLS Once your AmeriHealth Administrators COBRA administration services account has been set up, you will have access to online tools where you can add or view Qualified Beneficiaries or print reports related to your group s covered COBRA continuants. You should use your online COBRA tools to notify AmeriHealth Administrators of all new QBs. Access your COBRA tools through the eligibility maintenance portion of your AmeriHealth Administrators web portal. HOME SCREEN This is a example of how your online AmeriHealth Administrators COBRA tools home screen may look. QBs and Employees section: Add a new QB who has experienced a QE View all enrolled/pending/ terminated QBs Add a new employee to receive a DOL General Notice (additional fees may apply) View all employees who have been sent a DOL General Notice (if applicable) Reports section: Run existing reports Build and run custom ad-hoc reports View reports previously created and ed If you have any questions about these tools or if you need access to your AmeriHealth Administrators web portal, please contact your AmeriHealth Administrators COBRA administration representative. Page 18 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

19 USING AMERIHEALTH ADMINISTRATORS ONLINE COBRA TOOLS QUALIFYING BENEFICIARY (QB) ADD WIZARD Follow the simple 8-step Add Wizard to enter data for new QBs. Roll your mouse over the blue icons for additional helpful information. Client/Employer Selection screen: Confirm that your company name appears in the Client dropdown box and click Yes or No for each of the special situations listed, such as special severance wording or whether the QB needs to be notified that they were denied COBRA continuation coverage. Event Information screen: Complete information regarding the Qualifying Event, selecting from dropdown menus or entering dates requested. QB Group Information screen: Provide a Group name (a QB Group is a collection of associated participants, most often a family). QB Information screen: Add the identification and contact data for each of the QB group s members name, SSN, DOB, address, phone number, etc. Dependent screen: Add the identification and contact data for any COBRA-eligible QB dependents. Page 19 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

20 USING AMERIHEALTH ADMINISTRATORS ONLINE COBRA TOOLS QUALIFYING BENEFICIARY (QB) ADD WIZARD (continued) Benefit Plan Assignment Selection screen: Select your QB s COBRA benefit(s) assignment from the dropdown list of your group s Benefit Plans. Fill in the dates that the QB is eligible for COBRA, whether there s any waiting period before coverage begins (such as part of a severance package), and when premium billing should begin. Note the Tier level for coverage (whether solely for the individual or including spouse and/or children), and any subsidy information (if applicable). Prior Activity screen: This screen should be left blank (answer no to all questions) unless the QB already has had COBRA activity (eligibility notice has been mailed, enrollment letter has been received, enrolled QB is already making payments, etc.). Review and Save: You have a chance to review all information entered. If any corrections are needed, click on the Wizard Step in the right-hand menu to go back to the relevant section. If information is complete and correct, select Save and Continue. Page 20 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

21 USING AMERIHEALTH ADMINISTRATORS ONLINE COBRA TOOLS REPORTING ENGINE The AmeriHealth Administrators online COBRA tools include a robust reporting engine. Several existing templates give you easy access to run and view reports on qualified beneficiaries, your benefit plans, premiums and tracking of COBRA notifications. Plus, an Ad-Hoc Report Wizard walks you through selecting fields and creating reports with specific fields and filters customized for your organization s needs. INCLUDED REPORT TEMPLATES QB Reports QB Balance Report QB Detail QB Enrolled Premiums Listing QB Payment QB Status History QB Termination QB Termination by System Date Young Adults potentially Affected by PPACA Benefit Plan Reports Benefit Plan Information Report Benefit Plan Listing Client/Employer Reports Active QB Listing Certificate of Mailing COBRA General Notice Election Notices Employee Listing Premiums Reports Administrative Fee Collected and Credited ARRA Audit Report ARRA Eligible Reduced Hours ARRA IRS Report Disbursements including Non-Cash Payments Electronic Payments Premium Receipt Premium Receipt with Payment Premium Reconciliation Premium Reduction Summary Report Premium Reduction Summary by Payments Reconciliation by Payments (Voucher Report) Reconciliation by Plan Reconciliation by Disbursement Unapplied Premium Report System Integrator Reports Activity Report QB Identifier: Usually the social security number (SSN). Filter by QB Status: Choose one or several individual selections or Select All in the dropdown menu. View Report: Click this button to view data on screen. Export: In addition to viewing data on screen, the report can be exported to a PDF, image file, XML file, web archive, or an Excel document. Page 21 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

22 USING AMERIHEALTH ADMINISTRATORS ONLINE COBRA TOOLS AD-HOC REPORT WIZARD Follow three simple steps to create, view, and save custom reports containing only those fields and records you want. Data Selection screen: Check boxes to select each field to include in your report. You can select as few or as many fields as you want. Name your report for easy access later from the Home Screen. Filtering screen: You may choose to narrow your data results using one or more filters. Drill down further with the optional filter types for each included field. For example, create a COBRA status report that includes only those records where Field=Status, Type=Contains, and Text=Enrolled or one for a specific QB family, where Field=LastName, Type=Equals, and Text=Smith. Run and Save: Save your custom report to be accessed or run again at a later date. In addition to viewing data on screen, your ad-hoc report can be exported to a PDF document or other formats. Page 22 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

23 USING AMERIHEALTH ADMINISTRATORS ONLINE COBRA TOOLS QUALIFIED BENEFICIARY ACCESS Once they receive their login information, Qualified Beneficiaries can view and update their contact information and enroll online to make premium payments by credit card or ACH funds transfer. Detail Information: QB can view his or her personal identifying information as well as coverage dates, COBRA status, account balance, and payment due. Menu tabs: QB can choose to view/update contact information, payments made, or enroll to make payments online. Data window: The requested information appears in this window. Page 23 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

24 7COBRA ADMINISTRATION MONTHLY INVOICE The monthly invoice will include: administrative fees refund checks to COBRA members A total of all payments received for the invoiced month, less any NSF checks (non-sufficient funds) carrier payments for the invoiced month Monthly activity update Total COBRA notifications mailed for the invoiced month Total active COBRA participants for the invoiced month Any other debits/credits owed to the group for the invoiced month COBRA ADMINISTRATION STANDARD REPORTING MONTHLY REPORTS AmeriHealth Administrators will send monthly reports of all COBRA activity for your plan. Your company will receive a report even if you have not had recent activity on your account. The standard monthend reporting package will include: Monthly Invoice Summary This report summarizes the premiums and notifications processed. MONTHLY INVOICE SUMMARY This is a sample of what your Monthly Invoice Summary report might look like. Employer name Premiums collected PEPM (per employee per month) cost 2% administrative allowance Premiums refunded to individuals Non-sufficient funds (NSF) Monthly COBRA activity summary Additional credits/debits I Insurance carriers Based on the COBRA administration needs for your plan, your invoice Summary may look different. If you have any questions about this report, please contact your AmeriHealth Administrators COBRA Administration representative. Page 24 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

25 MONTHLY REPORTS Voucher Report This report displays details on the premiums received during the month. It lists all Qualified Beneficiaries who have made premium payments, the amount paid for each benefit (medical, dental, etc.), and for which month the payment will be credited. You may use this report to reconcile amounts received from COBRA participants and payments made to your insurance carriers. VOUCHER REPORT Employer name Invoice date range Qualified beneficiary (QB) ID number Check number Payment amount Amounts due Total premiums received (for date range) Page 25 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

26 Primary Qualified Beneficiaries (PQB) Listings report MONTHLY REPORTS This report provides a listing of all active COBRA members during the invoiced month. PQB ACTIVE LISTINGS REPORT Employer name Qualified beneficiary (QB) ID numbers Branch name (if applicable) Monthly premiums totals Notification Letter Issued Report This report displays all the members that you have informed us have experienced a COBRA Qualifying Event and were sent an election notice during the invoiced month, and the time remaining as of the report date for the member to elect COBRA coverage. Please review this report each month to ensure that AmeriHealth has notified all participants as requested. NOTIFICATION LETTER ISSUED REPORT Employer name Invoice date range Qualified event (QE) date Date notification processed Days remaining for QB to elect COBRA coverage Page 26 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

27 AS APPENDIX: SAMPLE FORMS This appendix includes copies of the forms listed below. Sample Content: Severance Letter Group Health Plan Designated Contact Form Page 27 FOR AHA CLIENT USE ONLY. AmeriHealth Administrators, Inc. 2012

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29 SAMPLE CONTENT: SEVERANCE LETTER Joe Smith 123 N. Main St. Anytown, PA Dear Mr. Smith: This notice contains important information about your Separation of Employment Agreement and your right to continue your Health Benefits under the «Group Name» Group Health Plan. COBRA eligibility begins on the first day of the month following the date of your termination from the company and extends for a period of 18 months thereafter. In the event you elect to execute the Separation of Employment Agreement and General Release ( Severance Agreement ), premiums for health coverage (less applicable associate contributions, which will be taken from your severance payments) will be paid from «FirstOfMonthAfterTermination» through «EndOfMonthSeveranceEnds» as indicated in your Severance Agreement. Should you wish to continue your health benefits, you will be responsible for payment from «FirstOfMonthSeveranceEnds» through the end of your eligibility period. Please be aware that in order to continue these benefits, you must submit the enclosed Health Benefits Continuation Plan Enrollment Form within the time period as indicated in the enclosed COBRA Packet. Please note that the time period wherein your health benefits are paid by the company runs concurrently with your COBRA eligibility period. Should you choose not to execute the Severance Agreement, but would like to continue your health coverage under COBRA, you will be responsible for payment from «FirstOfMonthAfterTermination» through the end of your eligibility period. The date on the Health Benefits Continuation Plan Enrollment Form is the date you became eligible for COBRA and from which your eligibility period is established. Please note that if you have a Health Flexible Spending Account (FSA), it does not run concurrent with your Severance Period. If you choose to continue your FSA, the first premium due will be due «FirstOfMonthAfterTermination». If you have any questions, please feel free to contact (XXX) XXX-XXXX. Sincerely, Benefits Specialist

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31 Group Health Plan Designated Contact Form HIPAA requires that a group health plan handle all interchanges of data that contain Protected Health Information (PHI) as follows: All group health plans must provide a designated group health plan contact name and address or group health plan contact title and address. The designee must be, an employee of the group health plan (or the plan sponsor) and cannot be a business associate of the group unless specifically requested by the group in writing. Reports containing PHI will meet the HIPAA Privacy Rule and applicable state(s) requirements. A disclaimer will be placed on all reports and other communications to the group health plan that may contain PHI stating that the PHI is being furnished to the group health plan designee only. Please complete all information and return to your marketing representative. Group Name: Designated Contact Name: Designated Contact Title: Mailing Address: Address: Telephone Number: Fax Number: I certify that the person or title listed above is an employee or designee of the group health plan or the plan sponsor. I further certify that I am an officer of the group authorized to make this designation. This designation will remain in effect unless revoked or changed, in writing, by an authorized officer of the group. Authorized Officer s Name: Authorized Signature: Title: Date: