Determining and Collecting Premiums

© Thompson Publishing Group August 2011 Tab 1400 • Page 93

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Fig. 1444

COBRA Premium Payment Checklist

Premium Administration Issue Employer/ Sponsor Responsibility?

TPA Responsibility?

Comments?

I. Bill and collect COBRA premium payments1. Send monthly invoices?2. Provide premium

coupon books?3. Allow for online

premium payment?II. Content of invoice or

coupon1. Premium amount2. 2%/50% administrative

charge3. Due date and grace

period4. Address for premium

payment5. Warning of conse-

quences for late pay-ment

6. Explanation of rules on insufficient payment (significant vs. insignifi-cant underpayment)

III. What if qualified ben-eficiary wants to add or change coverage, add or delete dependents or make other cover-age changes that impact the premium payment? Whose responsibility is it to communicate the revised premium?

IV. What if the employer adds/drops/modifies a coverage alternative? When does the employer have to inform the TPA of the change? What are the TPA’s responsibilities to communicate revised premiums?

V. Who is responsible for notifying TPA of all changes in insurer, premi-um rates, or other matters affecting plan coverage?

Determining and Collecting Premiums

Page 94 • Tab 1400 August 2011 Mandated Health Benefits

¶1444

Premium Administration Issue Employer/ Sponsor Responsibility?

TPA Responsibility?

Comments?

VI. What if an insurer passes through a premium re-bate, refund or other divi-dend? Whose responsibil-ity is it to pass through any savings to qualified beneficiaries?

VII. Whose responsibility is to notify qualified benefi-ciaries of late premium payments? When is this going to be done?

VIII. What happens if a pre-mium payment is not sufficient for the full premium? How will the payment be applied (e.g., apply as much as pos-sible to coverage that can be paid in full and notify of deficiency for other coverage?)?

IX. Who establishes the pol-icy for insufficient funds checks or stop payments?

X. Who is responsible for informing providers of the status of qualified ben-eficiaries pending their payment?

XI. How quickly will premium payments be forwarded to insurer or sent to employ-er?

XII. Who will maintain records of premium payments and postmarks?

XIII. Who will respond to inqui-ries concerning premium payments?

XIV. What is the applicable grace period? 1. Standard 30/45-day periods under COBRA? 2. Plan-based grace periods (at least as long as COBRA)?

XV. Are the rules established for calculating days (e.g., do Saturdays, Sundays and legal holidays count)?

Fig. 1444, continued

Determining and Collecting Premiums

© Thompson Publishing Group August 2011 Tab 1400 • Page 95

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Fig. 1444, continued

Premium Administration Issue Employer/ Sponsor Responsibility?

TPA Responsibility?

Comments?

XVI. What policies on “tolling” the premium payment period will apply (e.g., in cases of an incapacitated qualified beneficiary)?

XVII. Who will communicate rules to third-party payers (e.g., medical providers, hospitals, Medicaid agen-cies, etc.) who might pay COBRA premiums?

XVIII. Who will establish coordi-nation with HCTC admin-istration at IRS?

XIX. What special premium arrangements might apply (e.g., severance arrange-ments)?

XX. What compensation ar-rangements are made for the TPA?1. Normal fees2. Fees for extra services3. Fees upon termination

of the contractXXI. Who is responsible for

calculating, communicat-ing and administering the ARRA premium subsidy?