Looking at a vendor or a software solution—any solution—is the last thing
they’d consider. Yet, when it comes to COBRA administration, for many companies it would make more sense, financially and administratively, to have such a
solution rather than trying to handle everything themselves. Having an online
HR management system may seem like luxury at first, but the upside of having
one quickly outweighs the downside of having to pay for it.
COBRA administration is a burden on most employers; it takes time, effort
and brainpower to do it right. An online HR management system eases that burden tremendously. Such a system:
…automates many HR tasks, including COBRA administration, and
eliminates extra paperwork.
HR management systems, such as HRConnect, not only provide employers
and HR managers with the basic employee recordkeeping and communication
functions, but the portal also enables employers to link the employee information that they input in the system to COBRA, payroll and other services so everything is done with just a few clicks of a button. Some integrated HR systems are
also capable of synchronizing the employee census with that of the health insurance agent, making updates quick and efficient for both the employer and you.
Let’s use the HRConnect system as an example in the case when an employee
has been terminated. Instead of trying to figure out all questions that the employer needs to answer and find all the documents that need to be completed,
the HR manager logs into the HR system you provided and enters the employee’s
inactive status. The COBRA alert pops up and the HR manager fills out several
questions on the former employee’s eligibility. Once completed, all the information is sent to the COBRA provider automatically through the system; there are
no additional worries or legal repercussions for the employer.
…handles processing and responsibility through providers associated
with the integrated system.
After receiving all the information from the employer electronically, the
COBRA provider handles processing of COBRA elections, verification of continued eligibility, notices of qualifying events, notices of rate and benefit changes,
recordkeeping and billing and collection of COBRA premiums. In many cases,
your client will also get a dedicated account representative to answer their questions or concerns.
…eliminates the guesswork of which documents are required to be signed
by the employee and ensures that the documents are up to date.
Since many HR management systems also have a forms library, the employer
can simply open up the folder with all COBRA forms and print out the required
forms. These forms are continuously updated so the employer does not have to
search for them elsewhere. Having an easy access to such tools provides a
tremendous administrative relief to many employers.
…enables you to keep record of all your terminated employees.
As many employers are aware by now, those employers eligible to receive direct
reimbursement for the premium COBRA subsidy will need to provide the
Treasury Department with frequent detailed reports. These reports have to include evidence of the involuntary employment termination for each individual
receiving the subsidy, an amount of their payroll taxes for each reporting period
and estimated offsets for the next reporting period. An integrated online HR system automatically keeps the record of terminated employees and the reason for
their termination, making the reporting a little easier.
Providing or recommending such a tool to your clients will not only create an
efficiency process for them but will also enable you to save them a lot of money—
money that could be wasted on non-compliance penalties, attorney fees or litigation from employees who were not provided with an option for continuation
coverage. When recommending an HR management system where your clients
would be able to realize the full impact, be sure to recommend one that is integrated with COBRA, payroll and other services, and you may just see others coming to you for advice. HIU
