Carla: Hello, I'm your host, Carla Wardin. Today, I'm talking to Juli Kline, Director of COBRA Operations at ConnectYourCare, about direct billing services and COBRA. Hello, Juli. Welcome to the podcast.
Juli: Hi, Carla. Thanks for having me.
Carla: So, first of all, can you tell me a little about your job and what you do at ConnectYourCare?
Juli: Sure. I recently joined ConnectYourCare earlier this year, and I've spent nearly my entire career in the health plan and benefits administration industry. In my role here, I oversee all of COBRA direct bill operations, which means our team supports implementation, client services, processing, analytics, and file integrations for clients with COBRA direct bill administration at ConnectYourCare.
Carla: Well, that's exciting that it's a recent job. I'm sure you have lots of new and exciting things that you're doing. Particularly today, I'm interested about direct billing. Can you tell me what it is and how it works?
Juli: Yeah, direct billing is simply an administrative service for employers who have employees or former employees that are still benefit eligible for employer-sponsored benefits, but they're usually classified as inactive and are no longer receiving a paycheck. These benefits can be everything from health plans, such as medical and dental, but they also include life and disability insurance, as well as consumer-directed healthcare accounts.
Typically, when an employee is active, their portion of premiums and contributions are deducted from their paycheck. But when an employee's on leave or is inactive status, and not receiving a paycheck, it really becomes administratively cumbersome for an employer to manage enrollments and collect premiums for these benefits. So by leveraging direct bill services, an employer can ship that administrative function to a third party administrator, like ConnectYourCare, and we will enroll, invoice, collect, and remit premiums for those individuals on behalf of the employer.
Carla: I can see that would be amazingly helpful, because any administrative task that you can give to a third party always seems like that's a huge benefit for an employer. Now, I realize it also works with COBRA. Can you walk me through that?
Juli: Sure. So, under COBRA, only ERISA-qualified plans are eligible for continuation. To put it in the most basic terms, that means that there must be a healthcare benefit attached to the plan. So that includes the usual suspects, such as medical, dental, vision and pharmacy. It includes the healthcare account, such as FSAs, HRAs/FSAs. It could also include an employee assistance program, if there is a counseling benefit attached to the plan.
What isn't covered are the ancillary or non-healthcare plans, such as life and disability insurance and dependent care flexible spending accounts. Some employers may choose to allow employees to continue coverage in these plans, but they cannot be administered under COBRA, so this is where direct billing services can support employers who want to make these plans available to employees in certain situations.
Carla: Other than for Cobra, in what other circumstances would a company use direct billing services?
Juli: Some of the most common scenarios really direct bill would be for retiree benefits, furloughed employees, surviving dependents, and employees on leave of absence. The beauty of direct bill is that it is really only limited to the employer's plan administration rules. It is not governed by the complex regulatory environment that COBRA is subject to. So it's truly at the employer's discretion regarding how it fits into their broader benefit strategy.
Carla: Yes, complexity is usually a term that comes up when people are talking about COBRA. So, that's obviously one of the benefits that it can help with. What about employers themselves? How do employers benefit from direct billing?
Juli: Aside from the relief of the administrative burdens that I mentioned earlier, many employers don't always consider the fact that direct bill can enhance their overall benefits package as companies compete for talent. Companies are having to think about benefits for employees that are not in active status. And now more than ever, employees are also asking about retirement benefits, or how their benefits would be impacted if they need to take a family medical leave, personal, or even military leave. It could also be account retention strategy in the event of a furlough. So when you think about it, if an employee's furloughed, but if they still have access to their benefits, they may be in a better position to find temporary work to supplement lost income, and return back to their role with that company, as opposed to severing the relationship with that employer altogether.
Carla: I like how you say "now more than ever," because obviously the impact of current circumstances have affected all of us, and we know now that it works for employers. What about employees? What benefits are for them?
Juli: You know, when I think about what COBRA and direct billing services really represent, it's about people who find themselves in a period of transition. They are experiencing change, and even if it's viewed as a positive change, such as a retirement or a future opportunity, it can still be unsettling, especially when it comes to maintaining critical benefits for themselves and their family. 2020 quickly shaped up to be a year of change and uncertainty for all of us. Any these services give employees options, then can provide them with a sense of security, you know, when they find themselves in a period of transition or concern about maintaining benefits.
Carla: Security is something that we can all get behind. That's something we're all looking for. And where could our listeners go for more information about all of this?
Juli: Yes. We have a lot of great content on our website, www.connectyourcare.com, and there is a area in the menu called "Resources," that can take you to our ConnectYourCare Academy Series. We have a variety of series, depending on the different topics, but if you scroll to the bottom, you can see COBRA, and there's all kinds of information related to COBRA and direct bill services there. We do even have an on-demand webinar - the most recent one that we hosted in May of this year - that did cover some direct bill content in more detail.
Carla: Thank you so much to my guest, Juli Kline, and thank you all for listening. And again, for more information, you can always go to connectyourcare.com. Thank you for listening. Thank you, Juli.
Juli: Thanks, Carla.
Carla Wardin is the host of the ConnectYourCare podcast, Exclamation of Benefits. Carla brings her broadcasting and technology experience to talk to experts about the latest innovations in the benefits industry. Carla is an author, speaker, and marketing communicator from Michigan, where she and her husband are raising three boys on a dairy farm.