4 Steps to Easily Manage COBRA

4 Steps to Easily Manage COBRA

Let’s face it, off-boarding any employee is never fun. It’s the sour lemon, the piece of stale cake, you know, not the bee’s knees, as they say. Regardless, you should have a process in place when it comes to a demotion or termination of an employee. Mainly to ensure a smooth transition, and also to ensure you remain compliant. This is where COBRA comes in.

Off-boarding is a strategic process for transitioning employees out of an organization. This includes everything from equipment returns to exit interviews. Off-boarding also includes employer activities such as processing termination paperwork, calculation of the final paycheck, and ensuring that COBRA paperwork is mailed to the exiting employee.

Defining COBRA

COBRA is short for the Consolidated Omnibus Reconciliation Act. Say that five times fast. All kidding aside, COBRA was established in 1986 to provide exiting employees an opportunity to maintain their group health insurance coverage.  Employers who offer group healthcare coverage must notify all employee participants and dependents of their COBRA rights, eligibility, duration of coverage, payment expectations and premium notices.

  • COBRA notices are given to employees who are leaving the organization and dependents who are being removed from group coverage.
  • Employee participants have the option to continue their coverage for up to 18 months.
  • Employee participants have to pay 100% of the cost of coverage including what the employer had contributed in the past, plus a 2% administrative fee.

Improving Your COBRA Communication and Off-Boarding Process

The key to effectively managing COBRA and any off-boarding program is open communication and attention to detail. Here’s how:

  • Audit your termination and off-boarding process. Determine potential opportunities that exist for additional communication points for exiting employees. Walk yourself through the existing termination and off-boarding process. Develop a process flow chart that includes how HR is notified of an employee notice, any established communication points that exist between HR and the employee, and information and resources that are provided prior to the employee’s last day.
  • Talk to your current HR technology and service providers. Ask them for guidance. Decisely offers templates and guidance on how to manage COBRA and off-boarding.
  • Train managers and HR staff. Provide an FAQ (Frequently Asked Questions) document to include terms and definitions. This will provide your team additional information and resources to assist with the process.
  • Establish a 90 day off-boarding process that begins when the employee gives their notice. It should establish a work and communication flow that continues beyond when the termination is processed by HR and administrative staff. Off-boarding programs can include exit interviews, updating the exiting employee’s contact information and mailing address and sitting down with to address commonly asked questions you receive from employees after they have left the company.

The off-boarding process isn’t fun, but it is necessary. Programs like COBRA make this process and the overall transition much more efficient for both you and your employees.