COBRA Administration.

Kazdons COBRA Administration Services are your one stop shop for COBRA administration and compliance - from implementation to ongoing operations, including employer and participant customer service.

Kazdon provides a powerful combination of COBRA expertise and an innovative technology platform to ease your administrative burden, fully support your COBRA participants, and reduce employer risk of noncompliance.

The Consolidated Omnibus Budget Reconciliation Act gives workers and their families who loose health benefits the right to choose to continue their coverage in group policies for a limited period of time with certain circumstances. Administrating COBRA can be a full-time job all of its own. There are a lot of businesses that think they are saving money by trying to administrate COBRA in house, but actually outsourcing saves you money. It is next to impossible for one HR person to keep up with every aspect that they deal with and all of the ever changing compliance issues and laws.

What is COBRA continuation health coverage?

Congress passed the landmark Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provisions in 1986. The law amends the Employee Retirement Income Security Act, the Internal Revenue Code and the Public Health Service Act to provide continuation of group health coverage that otherwise might be terminated.

What does COBRA do?

COBRA provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. This coverage, however, is only available when coverage is lost due to certain specific events. Group health coverage for COBRA participants is usually more expensive than health coverage for active employees, since usually the employer pays a part of the premium for active employees while COBRA participants generally pay the entire premium themselves. It is ordinarily less expensive, though, than individual health coverage.

What group health plans are subject to COBRA?

The law requires employers with 20 or more employees, employee organizations, or state or local governments to offer COBRA healthcare continuation. Employers with less than 20 employees are not subject to COBRA.

Who is entitled to benefits under COBRA?

There are three elements to qualifying for COBRA benefits. COBRA establishes specific criteria for (1) plans, (2) qualified beneficiaries, and (3) qualifying events:

Plan Coverage:

Group health plans for employers with 20 or more employees on more than 50% of its typical business days in the previous calendar year are subject to COBRA. Both full- and part-time employees are counted to determine whether a plan is subject to COBRA. Each part-time employee counts as a fraction of an employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full time.

Qualified Beneficiaries:

A qualified beneficiary generally is an individual covered by a group health plan on the day before a qualifying event who is either an employee, the employee’s spouse, or an employee’s dependent child. In certain cases, a retired employee, the retired employee’s spouse, and the retired employee’s dependent children may be qualified beneficiaries. In addition, any child born to or placed for adoption with a covered employee during the period of COBRA coverage is considered a qualified beneficiary. Agents, independent contractors, and directors who participate in the group health plan may also be qualified beneficiaries.

Qualifying Events:

Qualifying events are certain events that would cause an individual to lose health coverage. The type of qualifying event will determine who the qualified beneficiaries are and the amount of time that a plan must offer the health coverage to them under COBRA. A plan, at its discretion, may provide longer periods of continuation coverage.

Kazdon COBRA Administration Services:

Supports all COBRA and direct billing services with a single, integrated web site used by employers and employees alike.

Provides employers with 24/7 access to participant and employer information.

Reduces administrative burden with:

  • Timely mailing of notices.
  • Timely communication of eligibility data to carriers.
  • Quality audit processing enrollment forms.
  • Rapid response issue resolution

Provides COBRA participants with mobile access to view their COBRA account, make COBRA payments, and re-print payment coupons, which helps those who no longer have access to a computer because of their employment status.

Expertise in handling all the challenging
aspects of COBRA compliance and
administration - from day- to-day
implementation details to
keeping abreast of trends,
regulatory and legislative
changes, and Department
of Labor rules and

Unparalleled COBRA and Regulatory Compliance Expertise

Total commitment to accurate and timely
processing of all notifications helps
prevent inadvertent extension
of coverage, reducing the
overall cost of claims.

Frees up benefits
staff to focus on more
important issues and
avoids the potential costs
associated with noncompliance.

Customized support for unique COBRA
administrative requirements in regard
to severance, leave of absence,
and eligibility reporting.

experienced Account
Manager and toll-free
client services hotline for

Dedicated, Responsive Customer and Client Service

Dedicated Kazdons COBRA Call Center
with multi-language support for

There are steep penalties for not complying with COBRA. Some of these violations include:

ERISA violations:

  • Violations after 7/29/97: up to $110 per day per violation
  • Other judgments, costs or damages
  • Audit and/or enforcement action by Department of Labor

Internal Revenue:

  • Excise tax of up to $100 per day per violation for each qualifying beneficiary (i.e., family of five would result in an excise tax of $500 per day) during the noncompliance period.
  • Employer contributions for the plan are disallowed

Public Health Services Act Violations:

  • Applicable to state and local governments
  • Action for “appropriate equitable relief”.

Private Lawsuits Against Employers and Plans:

  • Applicable to state and local governments
  • Action for “appropriate equitable relief”.