COBRA coverage with Priority Health

When you choose to offer COBRA coverage with Priority Health, you'll pay no administrative fees (fully funded plans) or discounted administrative fees (self-funded plans) while giving your employees the opportunity to continue health insurance benefits at times they would normally be ineligible (due to resignation, termination, leave of absence, layoff, etc.).

Since 1994, Priority Health has partnered with Infinisource, one of the foremost COBRA administrators in the nation, to offer COBRA coverage to Michigan employer groups at competitive rates.

Enrolling an employee in COBRA

Work with your COBRA administrator to make sure a terminated employee receives information about COBRA coverage. If a terminated employee does elect COBRA, you'll have to let your administrator know and enroll the employee in COBRA coverage directly with Priority Health. Your COBRA administrator won't enroll an employee for you.

Use the online Enrollment tool

You can enroll an employee in COBRA 24 hours after you've terminated the employee and dependents in the Enrollment tool. Here's how:

1. In the tool, click EDIT EMPLOYEE.
2. Search for the employee.
3. Once you bring up their information, click Enroll COBRA in the top right of the employee's personal information.
4. Follow the steps, and select the COBRA plan they're eligible for.
5. Once you're done, click FINISH.

Using Infinisource

If you use Infinisource for COBRA administration, visit the Infinisource website to get an application and plan administration information for the employee.

Federal COBRA rules and regulations

Find out everything you need to know about COBRA, such as:

• Who qualifies
• What needs to happen for COBRA coverage to begin
• How to maintain COBRA compliance

Go to details about federal COBRA rules and requirements.

What to do if you rehire an employee

• If you rehire a former employee or bring an employee back from layoff, you can re-enroll them using the online enrollment tool. Learn how to reinstate an employee.
• Be sure to notify your COBRA administrator that the employee no longer needs COBRA coverage

COBRA and the Michigan 1% claims tax

Employer groups can decide whether or not to include the 1% tax in their COBRA premiums in 2012 (if their plan hasn't renewed yet) and again in 2013. Priority Health and other insurers are adding the 1% tax as a separate line item on monthly billing statements, not as part of monthly premiums.

Here are some questions to ask yourself when making your decision about COBRA premiums:

Is this tax part of the applicable premium?

Section 4980B(f)(4) defines applicable premium as "...the cost to the plan for such period of the coverage for similarly situated beneficiaries with respect to whom a qualifying event has not occurred (without regard to whether such cost is paid by the employer or employee)."

It's not common, but some employers do factor administrative costs into the plan when calculating COBRA premiums.

If you do consider this to be a tax (not applicable premium) and charge it to the COBRA qualified beneficiaries, you must do the same for active employees.

Was the COBRA premium established before the start of the determination period?

A determination period is any 12-month period selected by the plan, but it must be applied consistently from year to year. According to Section 54.4980B-8, COBRA premiums must be set "…for a period of 12 months and shall be made before the beginning of such period." Most plans establish determination periods that coincide with the plan year. For plans that renewed January 1, 2012, including the 1% claims tax in the premium is a problem because the tax assessment is being made after the COBRA premiums were required to be established.

Does the tax constitute a valid reason to increase the COBRA premium?

COBRA premiums can be increased during a determination period for only three reasons:

1. The plan previously charged less than the maximum permitted.
2. The increase occurs during an 11-month disability extension.
3. The Qualified Beneficiary changes the coverage being received.

By omission, COBRA specifically prohibits midyear cost increases from being passed along to COBRA qualified beneficiaries.