Manley Services Broker Bulletin

July 13, 2010

Process Improvement for Collecting COBRA Premiums

We continue to take steps to improve our COBRA administrative processes—especially in light of the changes resulting from the ARRA subsidy (The American Recovery and Reinvestment Act of 2009). As you are aware, one of the challenges is to submit the full premiums—both the 35 percent from the COBRA continuant and the 65 percent subsidy from the employer—to the insurance carriers in a timely manner. Delays in the process cause eligibility problems, reporting difficulties, and added efforts to reconcile accounts. To mitigate these problems, we are implementing a new process: 

We will soon discontinue the practice of collecting both the COBRA continuant premium and employer premium. Instead, we will collect the premiums from the COBRA continuants and remit those directly to the employer group. The employer group then remits all premiums (adding 65 percent for an ARRA AEI) to the insurance carriers.

We have consulted with our COBRA system vendor and other experts in the field and discovered that this process is the norm across the nation. In the weeks ahead, we will be contacting you and your clients to set a date for making this change effective. After that date, we will begin remitting all COBRA premiums collected from COBRA continuants—both AEIs and non-AEIs—back to your clients. The clients will then remit the premiums to their insurance carriers. We will continue to provide all appropriate reporting.

We appreciate your patience as we make this process improvement. We are certain it will be advantageous for your clients, COBRA continuants, and insurance carriers. We will contact you soon to initiate this change and to answer any questions you may have.

Questions?
Please do not reply to this e-mail. If you have any questions or concerns, you are welcome to contact us at (541) 225-2760 or (877) 355-2760 or COBRA@manleyserv.com.

Visit our Web site: ManleyPlan.com.

This document is intended to provide our customers with general information regarding the American Recovery and Reinvestment Act. This document does not constitute legal or compliance advice, and you should consult your own legal counsel for specific guidance.