COBRA Compliance
Get up to speed on the new COBRA requirements of The American Recovery and Reinvestment Act of 2009 (ARRA).
Overview & FAQs FREE Webinar
Let Paycom Handle the New Stimulus COBRA Requirements for You
Paycom has been administering COBRA for clients since 2005 and because our software is proprietary we were able to
immediately implement the changes needed to comply with the new regulations:
- Users can now track in the payroll system whether or not an employee was terminated voluntarily.
- When a new termination occurs the user can choose from having Paycom send a standard COBRA Election Notice or a Stimulus COBRA Election Notice.
- Paycom sends all required correspondence (including re-notifying all terminated employees between 9/1/2008 and the re-notification date about the new subsidy).
- As premiums are received by Paycom, we upload the employer’s portion into the system.
- Paycom will handle all your former employee’s COBRA questions.
- Paycom will credit the subsidy amounts against your payroll tax liabilities each payroll (giving you instant credit).
- Paycom will complete your 941 with the COBRA subsidy amounts and number of Assistance Eligible Individuals (AEIs) receiving assistance.
- You can report on all former employees receiving the COBRA subsidy.
- You can track and report on the information required for subsidy reimbursement
Other Advantages of Paycom COBRA:
Enjoy integrated COBRA compliance
When you use Paycom’s payroll system and enter a COBRA qualifying event like a health care deduction or the termination of an employee, our uniquely integrated system initiates COBRA compliance
Rely on Paycom to send required COBRA correspondence
Paycom’s system can automatically send up to 30 different letters
based on varying circumstances including Initial Notices, Election Notices, Coupons, and late payment reminders. Required
notices are sent via Certificate of Mailing the next business day after a qualifying event is entered.
Required notices include the:
Initial Notice that is to be sent when an employee becomes eligible for group benefits. This notice is automatically generated when you set up the payroll deduction for benefits (this will work even for employers who pay 100 percent of the premium).
Election Notice that is to be sent when an employee on group benefits is terminated and when a beneficiary is no longer eligible for benefits, such as a divorced spouse. When an employee is terminated in the payroll system, the user is asked if an Election Notice should be sent. For beneficiaries like an employee's divorced spouse who is no longer eligible for health benefits, users simply click to generate an Election Notice. Once it has been indicated in the system, the Election Notice is automatically sent out the next business day.
Alleviate your COBRA administration headaches
Paycom handles the date tracking and premium payments for your current and former employees who are COBRA eligible. For those who elect COBRA benefits, we handle correspondence regarding their continued health insurance coverage, track dates and receive health insurance premium payments. We also send our COBRA clients monthly statements detailing all COBRA activity.
Limit your exposure for incorrect COBRA administration
COBRA laws are extremely complex and if you aren't careful and consistent with COBRA compliance, not only may your former employees and their beneficiaries suffer from a lack of health insurance coverage, the penalties for you as an employer can be costly. A critical aspect of COBRA compliance resides not just in following the proper steps and procedures but in documenting when and what was done. Paycom tracks over 30 dates to ensure compliance and we record and reconcile payments on a daily basis. Plus we monitor all new regulations affecting COBRA and adjust our system and procedures as needed.
