Cobra (Photo:Shutterstock)


Eligible workers who lost their jobs during the Great Recessionreceived a government subsidy for COBRA continuation premiumsthrough the American Recovery and Reinvestment Act (ARRA)of 2009. As we enter another economic downturn, it's possible thatfuture iterations of the Coronavirus Aid, Relief and EconomicSecurity (CARES) Act could result in a similar – or perhaps evenmore generous – COBRA subsidy. COBRA administrators can takeseveral steps to prepare their operations and clients for thispossibility.


Related: Employer compliance beyond CARES and FFRCA: Don'tforget the basics

1. Firm up your subsidy structure

Ensure you have a structure in place that accommodatessubsidized premiums coming from more than one source, and one thatallows you to adjust the subsidy amount between dollar orpercentage up to a fully covered premium amount. In addition,you'll need the capability to apply a subsidy to only certainbenefits – such as medical instead of dental – and to completeretroactive payment processes. Make sure you're clearly alignedwith insurance carriers and employers on how to manage premiumsowed and paid.

2. Outline processes and communications

Prepare custom notices and communications within your COBRAadministration platform that you can rapidly deploy should asubsidy take effect. You'll also need a print operation that canscale to significant proportions to manage the increased volume ofQualifying Event notices that you'll need to send or re-send.

3. Prepare customer service and operational processes andstaff

With a new subsidy will come increased questions, call volumeand servicing needs. Begin to draft employer-facing communicationsabout how the subsidy may work (based on your estimations from thelast government subsidy) so that you can fill in the details when anew subsidy takes effect and proactively reach out to clients andconsumer. Prepare your service and support staff with the righttalking points for the most common consumer questions and considersetting up IVR and pre-recorded messages.

4. Review client contracts

Take a closer look at your contracts with employer groups. Thinkabout how you may charge employers for this work. Will the amountyou charge vary if you charge a PEPM vs a per-unit-of-workmethodology? Be sure you can carve out the 2% administration feesfrom the premium/subsidy to properly manage the billingrelationship with the employer, too. If anything must change, beginthe process of amending your contracts.


Mark Waterstraat is president of consumersolutions at Alegeus.

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