COBRA & HIPAA



Setting Up COBRA

COBRA, "Consolidated Omnibus Budget Reconciliation Act" is a federal act that ensures health insurance coverage for a limited period to people, who lose their previous coverage because of one of the stated reasons. The reasons could be like Termination, Divorce etc. Even in case of Death of an employee, the covered dependents get COBRA coverage.

In short, if anyone was covered in any health plan provided by a firm, upon end of the coverage, the beneficiary gets a chance to stay covered for another few months. This is the simple logic of COBRA. This is in place to make sure no one gets de-enrolled from health coverage all of sudden. However there are clauses. The Beneficiary can get the COBRA Coverage only for 18 months. There are clauses with which the duration might get increased. The Beneficiary once enrolled has to pay 102% of the premium to the firm. So the Person pays 100% of the Premium, and again 2% of the premium to the firm, as a service charge; as the firm provides him the privilege of staying enrolled. Here are some details:

  • Upon Termination of coverage, all covered dependent of a Participant, are eligible either to continue with their own COBRA Coverage/ to be covered under the Original Participant.
  • Unless a firm has less than 20 employees as of the previous year, it must comply with COBRA.
  • The system checks for non COBRA Coverage as of day before COBRA coverage start date to allow / decline COBRA Coverage.
  • COBRA rates are always 102% of the Premium, unless the Employer wants to match.
  • COBRA usually provides only the Health Coverage plans: Medical, Dental, Vision. Sometimes with Prescription drugs, Health care spending accounts, and Dependent Healthcare Spending Accounts.
  • All the rates for COBRA comp objects are pulled from Participant directly; hence the activity type is always "Participant Individual Contribution".
  • If a participant fails to pay the COBRA Rate for a defined period, the Participant looses the Coverage. However a few firms allow a grace period to the employees, within which the Participant must pay.
  • Once found eligible to COBRA, the person gets a 60 days enrolment window to elect his COBRA Coverage. If nothing is selected in a plan type, it’s considered a non enrolment, so no default / waive default applies.
  • The employer is also responsible to intimate the Participants about their COBRA Coverage and enrolment Opportunities.

Now, let's discuss some functional parameters.

  1. Benefit Structure: We should have a separate COBRA Program to handle the COBRA Participants separately. Although it is not mandatory to have a different program itself; it is always better to have it separated from the other Programs. It helps in Rates and Eligibility determination.
  2. Life Events: We must have COBRA Life Events to initiate, maintain and terminate COBRA enrolments.
  3. Enrolments: The COBRA program enrolment requirements are bit different than the other programs, and we need to add them in place.
  4. Eligibility and Rates: The COBRA eligibility Profiles and Rates are very different than the regular ones.
  5. Communications and Extracts: We must set up the COBRA Communication types, the Extracts and the concurrent schedule to process the same.

So, we will have to take care of these five points in order to configure COBRA Program. We will discuss the points one by one and discuss how they help in setting up the Regulations.

 

Benefit Structure

  • There should be a separate COBRA Program.
    • Put the Program Type as "COBRA" or "COBRA with Credits"
    • The "Determine Enrolments Period Level" should be set to the level in which the COBRA Regulations are applied. It is advised to use PTIP.
    • The COBRA Administrator details must be entered, so that it appears correctly on SSHR and Communications. It can be done in Programs and Plans. For Programs, in Organization tab, enter our enterprise name, Name of the COBRA Administrator Person, and Role type as Administrator, in Organization, Organization Roles, and Organization Role Types fields respectively.
  • Continue with the same set of plans as the COBRA PLIPs will be different than that of the general PLIPs.
    • The Plans should have the COBRA Payment day defined.
    • The Plans should have the COBRA Regulation attached in details window.

Life Events

  • The following Life Events are needed to manage COBRA
    • Loss of Eligibility: Triggered when a Participant does not make any elections in the COBRA Qualifying event, hence losing the eligibility to the Program.
    • Non or Late Payment: Triggered when a participant fails to make a payment / makes a late payment.
    • Maximum Enrolment Period Reached: This LE is triggered when the Participant reaches the end of maximum period, either 18 months or more, based on the law.
    • Voluntary End of Coverage: Triggered when the Participant voluntarily asks for a termination in coverage.
  • Apart from these Maintenance life events, we will also need the Qualifying Life Events like, Termination, Retirement, Divorce, Death of a Participant, and Dependent Age out etc.
  • The Qualifying Events must have their "COBRA Qualifying Event" flag checked.
  • The Life Event eligibility must be defined at PTIP level; with Eligible/Ineligible code as "Either Eligible or Ineligible" and Max enrolment value as 18 months/ more as per the legislation.
  • The Maintenance life events must have the Life event eligibility defined as well; however with Eligible/Ineligible code as "Ineligible".

Enrolments

  • We need to set up our COBRA life event enrolment rules in such a manner that the Participants will not be able to change their Enrolment in the middle of a plan year.
  • No Defaults are set up for COBRA enrolments. If the Participant does not choose anything, he gets nothing.
  • The Minimum and Maximum number of enrolment allowed in the COBRA PTIPs can be made to 0 and 1 respectively; just to make sure we allow a participant to have "No Enrolments" too.
  • The Coverage start date and end date should be made in sync. Either always follow first of next month logic, or follow Event date logic, it all depends on the COBRA Qualifying Life Events.

Eligibility & Rates

  • The Eligibility Profiles must be based on each Plan types, set up in a manner, that it allows only two type of persons
    • The Participant is either experiencing a COBRA Qualifying Event / does have a COBRA Qualifying Beneficiary Record. The first one is for the First time eligible employees and the second one is for the Participants who are already in the Program.
    • Participants who were enrolled in the Plan type as of Day before Coverage Start Date; and are not found eligible as of Coverage Start Date. They should not have Eligibility to any other coverage too. The Eligibility to Other Coverage can be recorded in the Person DFF.
    • Participants who are enrolled in Medicare, lose their coverage in Regular / COBRA benefits; however if a Participant Opts for Medicare once he is in COBRA, its dependent can continue in COBRA for 36 months.
    • Dependents that were covered in the plan type as of Day before Coverage Start Date; and are not found eligible neither to be covered, not to participate as of Coverage Start Date.
  • We can again extend the eligibility in such a manner that, participants get only those plans in which they were enrolled as of day before Coverage Start Date, and the waive plan as an option to waive out.
  • The same functionality can be used in Options as well; however we should allow the Participants to use the less-than- equals to options (Options with same or lower tiers)
  • The Dependent Eligibility Profiles should be updated accordingly.
  • Rates should always be 102% of the Premium.
  • The activity type should always be the "Participant Individual Contribution".
  • We should avoid standard Variable Rate Profiles, unless needed.

Communication and Extracts

  • The COBRA letters are seeded by Oracle, we can then use the standard COBRA letters or we may write our COBRA letters using an Extract.
  • In the Communication types, for the COBRA Confirmation Letter
    • The Trigger should be set as : Post Enrollment Confirmation Literature -Form- Enrollment Results Created/Modified/Deleted
    • The usages must have the Program name listed.
  • For the "COBRA Benefits Notification Letter" and "COBRA Benefit Initial Information"
    • The trigger should be : Eligibility Literature - BENMNGLE- Determines First Time Eligible
    • The two processes: COBRA Benefit Notification Letter and COBRA Benefit Initial Information can be used to create COBRA Literature on one person / organization / Benefit Group / Locations.
    • There is a provision to update the seeded report with XML Publisher as well.

Setting Up HIPAA

HIPAA stands for Health Insurance Portability and Accountability Act. Although there were many clauses attached to this law; this act was mainly brought in to effect in 1996 to eradicate issues related to the Privacy of one’s health coverage history.

To know in simple language, a person who is enrolled in an Insurance Plan, is eligible to get a report of his Insurance history (enrolment start date, end date, Coverage) whenever he wants. So that he can supply the same to a new carrier for a new coverage. Sometimes Carriers need a similar kind of report, explaining someone’s insurance history, for a continuation of Coverage.

Now, there is a clause. The transfer of data must not be publicized. It must be done through a secure data transfer from one carrier to the other; so that the data is not available to anyone else other than whom it was meant to be.

Setting up HIPAA is very much simple, and straight as designed by Oracle.  The changes that we must do to accommodate HIPPA are:

·         Create or Update our Reporting Group to include HIPAA in it, as a regulation.(Same as we did for COBRA)

·         Update all our HIPAA Regulated Plans with HIPAA added as part of regulations.

·         Now, our HIPAA is set up.

The next thing we want is, setting up the communication, isn’t it? For that, we will have to go to the Maintain Communication type screen. If we query for it, we will find two seeded HIPAA letters there, HIPAA Letter and HIPAA Dependent Letter.

In the HIPAA Dependent Letter: Add the following two triggers:

  • HIPAA Dependent Loss of Coverage - HIPAA Dependent Lost Coverage
  • On-Line Participant Based Literature Requests - On-Line Request           

And in the HIPAA Letter: Add the following two triggers:

  • HIPAA Participant Deenrollment - HIPAA Participant Deenrolled
  • On-Line Participant Based Literature Requests - On-Line Request