Who is Included in the COBRA and Direct Billing Populations?
COBRA may need to be offered depending on the circumstances surrounding the employee’s direct bill coverage, and there are also direct billing scenarios outside of continuation coverage services. These are some examples of direct billing populations employers should be aware of:
Direct billing for COBRA makes it easier for employers to adhere to the rules. As a bonus, direct billing is also a valuable benefit for employees who qualify for these services.
“We’re seeing a lot more direct billing requests due to this year’s circumstances. Employees, now more than ever, are asking these questions–‘What’s the leave of absence policy?’ ‘How are my benefits impacted?’” Kline said. “Employees want peace of mind that they can continue to access the care and services they need.”
COBRA law does include deferred loss of coverage verbiage that will allow members to have active coverage beyond termination, and COBRA only needs to be offered if certain criteria are met. For example, employees can only continue coverage if they were already enrolled in the group health plan, and the coverage applies only to the benefits accounts they were actively enrolled in while employed.
As for leave of absence, COBRA would only come into play if the employee on leave of absence is being terminated from the COBRA-eligible plans. If this is the case, then COBRA would be offered to the employee and eligible beneficiaries like a spouse or dependent child. If the employee is still actively employed but on unpaid leave, benefits could be administered through the direct billing services to collect premiums usually deducted from payroll.
Direct Billing Provides a Sense of Security
With direct billing, employees gain the assurance that their benefits will continue, without a gap, if they experience job loss, retirement, or forced leave of absence.
“Whether planned or unplanned, people in need of COBRA and direct bill services are in a state of transition. Employees want to know that if something unexpected happens, they have a sense of security in a world of uncertainty,” Kline said. “When they know these services are out there, they have a safety net for the unknown. They want that sense of security, and we can give it to them.”
For more in-depth information about COBRA, we welcome you to watch our “New Demands of COBRA” webinar.