It’s the day no business owner or HR professional wants to think about … the day the company closes its doors forever. As you can imagine, this situation is fraught with complicated operational details … one of which could be COBRA.

On March 6, Forbes posted an article suggesting that employees across the nation are making up to 30% less than they should be, by not taking full advantage of the employee benefit plans available to them.

As these COBRA cases illustrate, COBRA compliance is a sticky issue! Here are three lessons from 2011 to keep you out of trouble in 2012! 

COBRA Compliance Case #1: Notice the power of COBRA notifications.

Many COBRA disputes hinge on one critical factor: If and when the COBRA notice was sent, and if it can be proven. In fact, this was the deciding factor in the case of Brooks v. AAA Cooper Transportation*. In this case, the benefits specialist personally placed the employee’s COBRA election notice in the employer’s outgoing mail, and produced a signed and appropriately-dated copy of the COBRA notice. In another case, Hearst v. Progressive Foam Technologies, Inc.*, the post office helped prove that the former employee received timely COBRA election notice. In this instance, the employer’s COBRA TPA presented outgoing COBRA notices to a Post Office clerk, along with a manifest list naming each person receiving the COBRA notice. The clerk then verified and stamped the manifest to provide proof of mailing.

Small Employers: Get Informed about Mini COBRA

It hasn’t been widely published, but in addition to complying with federal COBRA requirements, all employers need to be aware of their state COBRA compliance requirements, often known as mini COBRA laws. Did you know that in many states, there are new requirements impacting employers with fewer than 20 employees?

How PPACA will influence COBRA administration as we know it

In today’s economy, COBRA administration is more important than ever. A January 24 article from Gallup.com reports that the percentage of Americans lacking health insurance climbed to 17.1% in 2011. This is the highest percentage recorded since Gallup and Healthways began tracking in 2008. 

Love is in the air today and a few sticky COBRA situations are brewing too.

One of the qualifying events for COBRA is the divorce or legal separation of a covered employee. When love goes wrong and a newly-divorced spouse loses coverage, he or she may be entitled to benefits under COBRA. Seems straight-forward, but here’s the problem: COBRA coverage can be expensive and often the still-insured spouse is ordered to pay for this coverage as part of the divorce settlement.

Have questions regarding COBRA administration?  Our COBRA webinars make COBRA training easy!  Make time in your schedule and don’t miss out on these insightful tips to keep you current with COBRA administration compliance.