Region IV RMIC. SMART HR Retiree and COBRA Insurance

Transcription

1 Region IV RMIC SMART HR Retiree and COBRA Insurance May 2009

2 Contents Retiree and COBRA Insurance... 3 Useful Reference Materials... 3 Qualifying Events... 3 Loss of Coverage... 4 Continuation of Coverage... 4 Minnesota Statutes Section Retiree Continuation... 4 Who Is Eligible?... 5 Conflicts with State and Federal Law... 5 Tracking COBRA Using SMART Systems Software... 5 Coverage Continuation Notices Info - Setup Employer Address and Due Date... 6 Dependents tab... 9 Assigning Dependent/COBRA Enrollee ID... 9 Setting up Health and Insurance Plans Determining the COBRA Premium Due Dates and Grace Periods Building the Continuation of Coverage Rate Table Verify the COBRA/Retiree Plan Setup Notification Requirements Employer Notice Requirements Qualifying Event Notice Employer Notification Generating the Tracking Record Generating Notices in SMART HR COBRA Election Notice Page COBRA Election Notice Page Example of Mismatched COBRA/Retiree Information Maintaining COBRA/Retiree Information after Forms Are Returned Tracking Record Comments Tracking Report to Verify Information Entered in SHR Creating the Invoice Authorization Printing the Invoice Authorization Report Generate Accounts Receivable Entries Viewing Accounts Receivable Detail Receipting COBRA/Retiree Payments Notice of Termination of COBRA Coverage Day Conversion Notice Notice of Unavailability of COBRA Coverage Revoking a Waiver of Coverage Change in Name or Correction of Misspelled Name Correcting a COBRA Election Benefit Plan Setup Work Form SMART Finance COBRA Items to Review Region IV RMIC, Revised 05/26/2009 Page 2

3 Retiree and COBRA Insurance The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time. COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end. COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice. Minnesota continuation laws are similar to many of the federal COBRA provisions. In some instances, Minnesota continuation laws contain more liberal provisions than COBRA and in other instances the Minnesota laws are not as specific as COBRA. Please contact your insurance provider so you are in compliance with COBRA laws. Useful Reference Materials BCBS of Minnesota publishes a booklet called COBRA and Minnesota Continuation Laws that is very helpful in defining what COBRA is and how it should be administered. To download a pdf copy go to this website: _laws_booklet.pdf Qualifying Events The obligation to offer continuation of coverage is triggered by qualifying events. A qualifying event happens as a result of loss of coverage. When an individual loses coverage under a health plan, the reason must fall into one of the following categories to ensure eligibility to continue coverage. Both state continuation and federal COBRA laws contain the same qualifying events: Death of the covered employee Voluntary or involuntary termination of the covered employee s employment (other than by reason of gross misconduct), or reduction of hours of the covered employee s employment, including call to active military duty Divorce or legal separation of the covered employee from the employee s spouse Covered employee become entitled (enrolled in) benefits under Medicare Dependent child ceasing to be a dependent child under the generally applicable requirements of the plan Covered retirees in Chapter 11 bankruptcy reorganization Region IV RMIC, Revised 05/26/2009 Page 3

4 The triggering event plus a loss of coverage equals COBRA/continuation qualifying event. If the triggering event occurs but there is no loss of plan coverage, there is no qualifying event. If the loss of plan coverage happens for a reason other than the six qualifying events listed above, there is no qualifying event and no obligation to offer COBRA/continuation. Loss of Coverage The loss of coverage means the participant is no longer to be covered under the same terms and conditions that were in effect immediately before the qualifying event. A loss of coverage can result from: termination of employment; any change in the terms or conditions of the coverage; an increase in required premiums; a reduction in benefits; and a requirement of any action to retain coverage. Not every loss of coverage under a health plan is considered a qualifying event. For example, if an employee drops coverage for a dependent that was still eligible under the health plan, the employer is not required to offer continuation of coverage to that dependent because this would not be a qualifying event. Continuation of Coverage Continuation of insurance coverage laws have been in existence for many years. These laws were initiated to provide continued access to health insurance at favorable group rates in situations where an individual would otherwise lose employer-provided coverage. Prior to the enactment of these laws, individuals who lost their employer-provided coverage were often left uninsured. There are two main bodies of law that regulate continuation coverage for group health plans in Minnesota: federal COBRA requirements of ERISA and the federal Public Health Service Act (PHSA), and state continuation laws. For the most part, the two federal laws contain the same requirements for continuation but apply to different types of health plans. Minnesota Statutes Section Retiree Continuation Political subdivision such as counties, municipal corporations, towns, school districts, etc., may provide group insurance to their officers, employees, retired officers and employees. Political subdivisions that provide group health and dental insurance to their employees must provide former employee who meet certain criteria and their dependents the opportunity to continue their coverage indefinitely. Minnesota Statutes section does not apply to group life insurance. The former employee must pay the equivalent of what it cost the group to maintain this coverage. Region IV RMIC, Revised 05/26/2009 Page 4

5 Who Is Eligible? The law defines those eligible for this benefit as former employees who are receiving a disability benefit or an annuity from a Minnesota public pension plan other than a volunteer firefighter plan, or those who have met the age and service requirements necessary to receive an annuity from such a plan. Conflicts with State and Federal Law Some of the provisions in Minnesota Statutes Section are not consistent with federal or other state continuation statutes. In situations where this law may be less favorable than state or federal law, the more liberal provision will apply. This law does not limit the rights granted to former employees under other state or federal law, or under collective bargaining agreements or personnel plans. Tracking COBRA Using SMART Systems Software The retiree and COBRA insurance tracking features used in the SMART Systems Software were developed to address the many recordkeeping requirements associated with the continuation of health, dental, and life insurance coverage. The employer may want to have their legal counsel review the notices generated by this software, prior to relying on them for compliance with Federal and Minnesota COBRA laws and regulations. This document is provided as a training tool for automating the COBRA tracking process using SMART Systems Software. It is not intended to provide guidance and training for COBRA compliance with state or federal laws & regulations. Features of SMART Systems COBRA module allows you to: Generate personalized documents o COBRA Continuation Election Notice Notify individuals of their right to continue coverage. o COBRA Continuation Election Form Completed by the individual and returned to the employer with decisions regarding continuation of coverage. o Notice of Termination of COBRA Coverage Notify individuals whose COBRA coverage will be terminated before the maximum period of coverage ends, and why. o 180 Day Conversion Notice Notify individuals of conversion options within the last 180 days of COBRA coverage continuation. o Notice of Unavailability of COBRA Coverage Notify individuals who are not eligible to continue coverage, and why. Track the decisions made by employees, spouses, and dependents regarding the COBRA options for which they are eligible. Region IV RMIC, Revised 05/26/2009 Page 5

6 Create SMART Finance Accounts Receivable entries, for those who elected to continue their coverage - automatically debiting and crediting accounts for o the amount of the premium paid by the employer (if any) o the amount of the premium paid by the participant (if any) o the amount of an administrative fee charged to the participant (if any). Track changes to a participant s insurance coverage over the term of the COBRA continuation. Store, for future reference, miscellaneous comments and reminders you choose to enter regarding a participant s COBRA continuation coverage. Generate reports of the information that has been entered. Coverage Continuation Notices Info - Setup Employer Address and Due Date Payroll Module MN Payroll Setup MN Setup Federal Entities Use the Setup Federal Entities window to review and update the information that will be used when the COBRA Election Notice and COBRA Election Forms are printed. Note: This is a one-time setup unless the district contact person changes, the district address, district phone or fax number changes or the due date for COBRA payments change. In most cases this information will be the same as the employer s regular name-address-phonefax information unless the district uses a third party administrator for COBRA processing. This information is used when the COBRA Election Notice and COBRA Election Forms are printed. The COBRA information is found on the bottom left-hand corner of the Setup Federal Entity window. Region IV RMIC, Revised 05/26/2009 Page 6

7 Contact Person. The name of the person in the district office that the COBRA/Retiree will return the notice to. TPA Agency Name. The name of the Third Party Agency (TPA) or your district name if you administer your own COBRA. Address Line 1. The address for the TPA or the school district. Address Line 2. The second line of the address for the TPA or the school district. City St Zip. The City, State and Zip code of the TPA or school district. Office Phone. The phone number of the contact person. Fax. The fax number of the contact person. When Due message. Words that tell the COBRA/Retiree participant when the payment(s) are due to the school district. For example the first page of the COBRA Election Notice is similar to the following: Region IV RMIC, Revised 05/26/2009 Page 7

8 The words that are entered in the When Due message field in the bottom left corner of the Setup Fed Entity window are used when the COBRA Election Notices are generated. It appears in the following paragraph on page 5 and again in the following paragraph on page 6 If you change the default When Due message be sure that the wording will make sense in the above two paragraphs. Avoid long phrases, because they will not wrap to the next line when the notice is Region IV RMIC, Revised 05/26/2009 Page 8

9 printed. It is recommended that you test-print an election notice if you change this phrase to confirm that the words appear as you want them to. Dependents tab Payroll Module MN Employee Information MN Employee Info Addnl COBRA utilizes the dependent window to determine what dependents are eligible for COBRA continuation. You will need to enter in the dependent s information for employees that have coverage other than single coverage. Options for populating the dependent tab include: 1. Enter the dependents listed on insurance enrollment form(s) for all new hires from this point forward 2. Send an out to all employees eligible for insurance asking them to use ESS to update their dependent information. If they update the information in ESS it will automatically be updated in SMART HR 3. Pull the employee s original insurance enrollment form (or change form) from the personnel folder and use that to update the dependent information Assigning Dependent/COBRA Enrollee ID Name. First, Middle, last Address. One line of the address is required City, State, Postal Code. Telephone. Enter the employee s home telephone number Relationship. Enter the relationship of this dependent to the employee. SSN/SIN. The social security number is an optional field and is not required. Birth date. Enter the birth date of the dependent. Gender. Click the radio button for female or male. Region IV RMIC, Revised 05/26/2009 Page 9

10 Check boxes. Click into the check boxes that apply to this dependent. Options are full-time student or employee dependent. The beneficiary box is not used. Note: Each dependent is assigned a dependent ID (circled in the screen shot above). These id s are visible on this window. If a dependent enrolls in COBRA, the dependent ID will be their COBRA Enrollee ID and will also be their customer code for the SMART Finance invoices once invoices are created. Setting up Health and Insurance Plans Benefits Module Benefit Setup Setup Health Plans or Setup Insurance Plans Use Setup Health Plans for each health or dental insurance plan offered to employees. Use Setup Insurance Plans for each life insurance plan offered to employees. Refer to the example below. Use the benefit plan setup form found on the last page of this document to write down how the benefit plans used for COBRA processing to help you build your plans using these windows. This normally a one-time setup unless plans change or the gl accounts used in the Retiree and COBRA GL Setup change. Setup Reminder: The Health or Insurance Plan code (Benefit Plan (BP) Code) cannot be the same name used for a current deduction code or rate table code being used elsewhere in SMART HR. The benefit plan names must be unique for COBRA/Retiree setup. Region IV RMIC, Revised 05/26/2009 Page 10

11 Health Plan. Avoid entering duplicates used with other codes. Try to make the code unique to the plan. (i.e. if you use deduction benefit rate tables these names cannot be the same as those) Limited to 10 characters. The following are a few examples: BCBS0500 HEALTHBP BCBSVEBA BCBSRETIRE NATLLIFE MADISONLIF LIFEBP LIFERETIRE DELTADENT DENTALBP DENTRETIRE Regional Comments: Think about using a generic plan name such as HEALTHBP (health benefit plan) instead of BCBS100BP (Blue Cross Blue Shield $100 deductible benefit plan) so if your district changes health insurance companies or the deductible plan changes it will not affect COBRA/Retiree elections. Note: Some districts use RETIRE in the description to keep COBRA and Retirees separated for tracking purposes. Start Date. Use the district effective date for this plan. Note: This should be on-or-before the Qualifying Event Dates that are entered on Tracking rows for this plan. Be sure the CONTCONV is equal to or greater than this date or the coverage will not be pulled in for COBRA tracking. Note: Remember to click on the retrieve icon or you will not be able to save this window after you enter all the information. Description. Limited to 30 characters. Enter the description you want to appear on the invoice that is given to the participant. The description is also used on some of the reports. Stop Date. Leave as 00/00/0000 COBRA. Set the flag to Y for all COBRA benefit plans. Override Eligibility. Do not check this box. Conversion Option. This option should be set to Yes for each plan that gives the participant the right to convert their group coverage to an individual plan without limitations on pre-existing medical conditions. Based on information that was available at the time this document was written, this will probably be Yes for the plans that Minnesota school districts offer to their employees. This option determines whether or not a 180 Day Conversion Notice can be printed for this plan. Eligibility Formula. Enter as ELIGIBLE = "Y"; Note: The semicolon is required at the end. Click on the Verify Formula button. Quick Tip: You can type the account codes or double click a row to use the account lookup. Premium (credit account). Enter the 215 balance sheet account that will be credited when COBRA invoices are generated for the COBRA participant or retiree. This should be the same balance sheet account that is debited when the payment is made to the vendor for the insurance coverage. Employer (debit account). Enter the expenditure account that is to be debited for the amount (if any) that an employer contributes to the monthly cost of insurance for the COBRA participant or the retiree. This is an optional field. Admin Fee (credit account). Enter the revenue account that is to be credited for the Administrative Fee that is charged to a COBRA participant or retiree. This is an optional field. Note: You can setup the fee as a default and override by employee. Region IV RMIC, Revised 05/26/2009 Page 11

12 Regional Comment: We suggest tracking COBRA/Retirees using a unique 215 account. This keeps accounting cleaner. Do not use the health, dental or life insurance 215 account; setup a new one. Default. Enter the default value that will determine the Administrative Fee (if any) to be paid by the COBRA participant. A value less than is interpreted as a percent. A value greater than or equal to is interpreted as a dollar amount. This value can be overridden at the employee level for a particular benefit plan. It is suggested that this value be entered as a percent rather than as a dollar amount because current COBRA regulations specify a maximum administrative fee of 2% of the monthly premium. If a dollar amount is entered, it could unintentionally result in an administrative fee in excess of these limits. This is an optional field. When you click the file cabinet, you will need to click Yes on the following two dialog boxes that don t apply to this situation. Determining the COBRA Premium A qualified beneficiary who continues coverage must pay for the full coverage. The employer may contribute to the cost of continued coverage but is not required to. Premiums charged to a qualified beneficiary may not exceed 102 percent of the plan s cost for other active individuals covered under the plan. Minnesota law permits a Plan Administrator to charge a disabled employee only 100% of the premium paid by active employees. No administration fee is permitted. Due Dates and Grace Periods The initial payment is due within 45 days of the qualified beneficiary s election to continue coverage. Subsequent payment due dates are established by the employer and can be no more frequent then monthly. The employer is required to allow at least a 30-day grace period from the date the contract charges are due. There are reports available in SMART Finance that will help you track late payments. Region IV RMIC, Revised 05/26/2009 Page 12

13 Building the Continuation of Coverage Rate Table Payroll Module MN Payroll Setup MN Setup Rate Tables -or- Benefits Module Benefit Setup Setup Health Rate Tables Use a recent monthly invoice for each of the benefit plans you just setup to gather information to setup the CONTCOV (Continuation of Coverage) rate table. When it is completed, the rate table will look similar to the following example: Factor 1 Will always be PREMIUM Factor 2 Enter the code used to describe the benefit plan. Field is limited to 10 characters. Important: Factor 2 has to be an exact match to the benefit plan established for COBRA or the information will not be printed on the COBRA Continuation Election Notice Factor 3 Enter the code used to describe the coverage in the benefit plan. Field is limited to 10 characters. Note: For life insurance, factor 3 has been given values to reflect the face value (dollar amount) of the insurance coverage. Consider entering the dollar amounts using leading zeroes so they sort ascending in the rate table for easier selection using the drop down listbox. Factor 4 Will always be an asterisk * Do not enter anything other than an * into this field! Factor 5 Will always be an asterisk * Do not enter anything other than an * into this field! Amount Enter the entire monthly premium for the coverage in the plan even if some will be paid by the participant and some by the employer. Start Date Use the original start date of the benefit plan or the renewal date of the benefit plan if rates change from year to year. Stop Date Leave the stop date set to 00/00/0000 Region IV RMIC, Revised 05/26/2009 Page 13

14 Verify the COBRA/Retiree Plan Setup Benefits Module Retiree and COBRA Insurance Retiree AND COBRA Plan Setup Report Run this report to verify that the plans are setup correctly. Notification Requirements Employer Notice Requirements Proper notification and documentation of the notice to qualified beneficiaries should never be underestimated. If proper notice is not given and coverage is terminated, the employer could be held liable for the employee s coverage to the same extent as the insurer would be if the coverage were still in effect. Keep in mind that the employer bears the burden of proof that proper notification has been made. Qualifying Event Notice Upon notice that a qualifying event has occurred, the employer is required to send out a specific qualifying-event notice to qualified beneficiaries advising them of their continuation rights. This notice must contain an explanation of continuation rights and obligations, as well as all election, payment and notice deadlines. It should also contain an election form and a premium schedule. Under Minnesota law the qualifying event notice must be in writing, addressed to each qualified beneficiary, and be delivered by first class mail to the employees last known address. Federal COBRA required that the notice be sent by first class mail, hand delivered, certified mail or electronic transmission. However, proving that the notice was delivered is easier if the employer s practice is to use first class mail obtaining a certificate of mailing or using certified without receipt as the most effective means of establishing that the COBRA notice was delivered. All qualified beneficiaries are entitled to a Qualifying Event notice of COBRA rights but the Department of labor has indicated that one notice mailed to all qualified beneficiaries who reside at the same address is sufficient provided that the notice explains that each qualified beneficiary has an independent election right. Separate notices must be sent if there are multiple addresses. Region IV RMIC, Revised 05/26/2009 Page 14

15 Employer Notification Employers have 14 days under COBRA or 10 days under MN continuation laws to send the qualifying event notice. The qualified beneficiaries must be allowed 60 days to elect continuation coverage. The 60-day time frame begins on the date coverage would end due to the qualifying event or the date of the qualifyingevent notice, whichever is later. If the qualified beneficiary fails to make an election to continue within this time frame, he or she forfeits the right to continue coverage. Generating the Tracking Record Benefits Module Retiree and COBRA Insurance Generate Tracking Records Use this window to generate the Retiree/COBRA Election Notice. Record the information as shown below. Employee ID. Use the binoculars to retrieve the employee who is associated with the qualifying event. Make your selection and click on the retrieve icon. Event Type. Use the ddlb (drop down listbox) to select the qualifying event. Event Date. Enter the date the qualifying event actually occurred. This date is used to determine the deadlines for the election process. Normally will be the last day of work. Region IV RMIC, Revised 05/26/2009 Page 15

16 End of Coverage. Enter the date that insurance coverage will end as a result of the qualifying event. This determines the date that COBRA coverage can begin. (When does their coverage with the district stop?) Employer Aware. Enter the date that the employer became aware of the event. This date is used in determining deadlines for the election process. Choose Benefit Plans. Enter a checkmark for each benefit plan that will terminate for the employee or the employee s dependent(s). Only checked plans will appear on the COBRA election notice(s). Choose Election Notice Recipients. Enter a checkmark for each person who should receive a COBRA election notice. In this example, Aubrey Anderson is not checked because she is living with Robert Anderson and is not 18 years old. The bottom left corner shows the employee and dependent address, birthday if available and age using the End of Coverage date. Generate. Click on the Generate button to create the new rows based on the benefit plans and election notice recipients you entered. The bottom right corner of the window will display the new tracking rows that can be created for this event. It may be necessary to uncheck a row if a person was not covered by a benefit plan when the qualifying event occurred. Normally there will not be any previously created rows that appear. If any tracking rows have previously been created for this qualifying event, they will be displayed in the upper right corner of the window. Save Checked Rows. The bottom right corner of the window will display the new tracking rows that can be created for this event. It may be necessary to uncheck a row if a person was not covered by a benefit plan when the qualifying event occurred. Click on Save Checked Rows to save your changes. 4 Region IV RMIC, Revised 05/26/2009 Page 16

17 Generating Notices in SMART HR Benefits Module Retiree and COBRA Insurance Print Notices The Print Notices window is used to print COBRA Election Notices to be delivered or mailed to the recipient in time to meet the COBRA deadline. Select the COBRA Continuation Election Notice radio button in the upper left-hand corner. Click any row for the person whose notice you want to print (this will select all rows for that person). Click the Print button. A COBRA Election Notice and one or more COBRA Election Forms will be generated and can be printed. This will store today s date as the Date Notified for each of the tracking records. After you generate COBRA notices an enrollee ID gets assigned to the employee. You will have one notice for every plan selected. Repeat the process for each of the recipients. Re-print. The original notice can only be printed one time. However a notice can be reprinted as many times as desired without affecting the original Date Notified. Each of the reprinted notices will include the following reprint statement. Region IV RMIC, Revised 05/26/2009 Page 17

18 COBRA Election Notice Page 1 Region IV RMIC, Revised 05/26/2009 Page 18

19 COBRA Election Notice Page 2 The information that is printed on the page above is retrieved from the benefit plans the person is eligible to enroll in, from the CONTCOV rate table. Do all the plans and coverage options appear on this page for the eligible participant? Are the rates correct? Are the plans and plan descriptions correct? If the plans do not display then you have a mismatch between the benefit plan setup and the rate table setup. Example of Mismatched COBRA/Retiree Information The plan BCBS0500 is not in the rate table CONTCOV and will not be displayed until it is added to the rate table. -OR- Setup Health Plans window has not been setup for the plan BCBS0500. It will not be displayed until you set the plan up. Region IV RMIC, Revised 05/26/2009 Page 19

20 Pages 3 and 4 of the COBRA Election Notice are the same in all cases. Region IV RMIC, Revised 05/26/2009 Page 20

21 Pages 5 and 6 are the same with the exception as to what is setup in the MN Setup Federal Entities window. Region IV RMIC, Revised 05/26/2009 Page 21

22 One COBRA Election Form is generated for each benefit plan the enrollee is eligible for. If they have health, dental and life insurance the module will generate THREE forms. It is important for the employee to complete and sign each of the COBRA Continuation Coverage Election Forms and return them to the Business Office by the deadline so they can be entered into SMART HR to complete the COBRA election process. Region IV RMIC, Revised 05/26/2009 Page 22

23 Maintaining COBRA/Retiree Information after Forms Are Returned Benefits Module Retiree and COBRA Insurance Maintain Tracking Records When the COBRA Continuation Coverage Election Form(s) are returned use this window to record the employee s decision on the coverage continuation for the benefit plans they were eligible for. Note: Employee has 60 days to return the continuation notice to you. Notice that when you click on the binoculars you no longer see the Employee ID. It is now called the Enrollee ID. This is because some of the enrollees are dependents or spouses of employees rather than employees. An Enrollee ID appears on the Election Notice, the Election Form and also on the Dependents tab on the MN Employee Info Addnl window. Note: The enrollee id s are assigned when you update the dependent tab on the MN Employee Info Addnl window or when an employee updates the beneficiary information (if available for your district) on ESS. Tracking Record Comments There is a Comments button available on the Maintain Tracking Records window if you need to record additional information. If the COMMENTS button is highlighted yellow it means a comment has been recorded. The Comments box will be highlighted in yellow if any notes have been saved Click the comments button to enter new comments and click on OK to save Click the comments button to view previously saved information Click the comments button then click on the Print button to print the comments Region IV RMIC, Revised 05/26/2009 Page 23

24 Benefits Module Retiree and COBRA Insurance Retiree - COBRA Tracking Comments Report This report can be run to view the comments regarding employee continuation of election decisions. Maintain Tracking Records window Example of how to document the Enrollee s Decisions: This example illustrates three election forms and assumes the forms were returned on 06/24/ Employee elected to continue the health insurance plan 2. Employee waived coverage for the dental plan 3. Employee elected to continue coverage for life insurance Enter the date you received the enrollee decision for coverage continuation Select the enrollee s decision from the drop down listbox Coverage start and stop dates are automatically assigned if the decision entered is Enrolled Coverage. Note: If the enrollee has unlimited coverage the stop date will be changed to 00/00/0000. Region IV RMIC, Revised 05/26/2009 Page 24

25 Maintain Tracking Records Window Example Recording Employer Decision: Robert is Elizabeth s ex-husband. Elizabeth is required to continue her family coverage so Robert did not sign and return the health insurance coverage continuation form. The employer needs to track this employee s information showing he did not return the health or life insurance coverage continuation forms. Enter the effective date. Can be one day later then the Reply Due date or another date of your choosing Select the employer Decision of No Response from the ddlb. Robert did sign and return the dental insurance coverage continuation form enrolling in coverage but never made a premium payment. The employer terminated his coverage because of late payment and recorded their action using this window. Enter the effective date. This should be the date the employer made the decision to terminate coverage and would normally go back to the first day the enrollee would no longer be covered because of the delinquent payment. Select employer Decision of Term-Late Pymt from the ddlb. Region IV RMIC, Revised 05/26/2009 Page 25

26 Tracking Report to Verify Information Entered in SHR Benefits Module Retiree and COBRA Insurance Retiree COBRA Tracking Report The tracking report can be run for all enrollees or for a specific enrollee. It displays all pertinent dates needed for COBRA processing and tracking. It also includes information about the employer decision in cases where forms are not returned or coverage is terminated for late payments, change in status, etc. Region IV RMIC, Revised 05/26/2009 Page 26

27 Creating the Invoice Authorization Benefits Module Retiree and COBRA Insurance Invoice Authorization The Invoice Authorization window is used to select the continuation coverage the enrollee elected. Retrieve the Enrollee ID Select a tracking row such as BCBS0500 In the corresponding rows that become visible in the bottom half of the window, o Choose the appropriate coverage (family, single or face value of life insurance) o Enter a value for the employer contribution in the Employer Amount or Percent field(s) if the employer is making a contribution towards COBRA or continuation of insurance for retirees o If the default Administrative Fee value is correct this window is complete. If not, you will enter the correct amount in the Admin Fee Override field. If you would like to default the fee to zero for this enrollee check the Set to Zero box Click the file cabinet to save the change(s) Repeat the process for each of the tracking rows This window will be used during the COBRA continuation period as a maintenance window for things such as entering additional authorization rows when open enrollment changes occur: changes in the Employer Amount or Percent changes to the administrative fee changes in the active plan changes to the plan coverage Region IV RMIC, Revised 05/26/2009 Page 27

28 Printing the Invoice Authorization Report Benefits Module Retiree and COBRA Insurance Invoice Authorization Report A report of the invoice authorization data is available as shown below: When you run the report it asks for As of Date. It wants to know what invoices you are looking for as of a certain date. Notice the dates above are from 08/01/2008 to 07/31/2011. No information is returned if you use a date earlier then 08/01/2008 Information is returned if you use dates between 08/01/2008 to 07/31/2011 No information is returned if you use a date later then 07/31/2011 Generate Accounts Receivable Entries Benefits Module Retiree and COBRA Insurance Generate Invoices This window is used to generate invoices. Each month, Accounts Receivable entries are created for coverage continuation enrollees using the Generate Invoices window. Note: Once you generate invoices they are automatically sent over to finance. The only way to change an invoice is to void it in finance. Region IV RMIC, Revised 05/26/2009 Page 28

29 Double click a row to check or uncheck all rows for the month. Coverage Through. Enter the ending date you want to use to create invoices. You can create invoices for one month of coverage or for multiple months. In this example we used an ending date of 12/31/2008 which will create invoices for August, September, October, November and December. Invoice Date. The invoice date is required and must be entered. This is the date that will appear on the invoice sent out to COBRA/Retiree participants. AR Period. The AR (accounts receivable) period must be entered. This is the date used in finance. Batch Number. The Batch Number is optional. It is important to use a batch number if your district sends out invoices for other things besides COBRA. Regional suggestion is COBR09 if you want to define it by year or simply COBRA. Batch number is limited to six characters. Contact your SMART Finance support person for more information regarding these three fields. Generate Invoices. Before clicking the Generate Invoices button, you may uncheck a specific row to prevent it from being included on the invoices that will be generated. The window will check, or uncheck, all rows for a month, if you double click a row. Click the Generate Invoices button to enter accounts receivable information for each of the checked rows into SMART Finance instead of entering it by hand. After the Generate Invoices button has been clicked, the checked rows will not appear on the window again, unless the invoice is voided in SMART Finance. If you want to provide paper invoices to the enrollees, use the SMART Finance Accounts Receivable system to print them. If an enrollee is setup for automatic payment to your district bank account, the invoice can be setup as a wire so a paper copy is not printed. Regional Comment: The COBRA/Retiree enroll ID is assigned as a Customer ID with vendor group C (for COBRA) in SMART Finance) when invoices are generated. Regional Comment: If you have used SMART Finance to invoice COBRA/Retirees already in the past, it might be helpful to put the old customer code into the comments box available in SMART HR for future reference. Region IV RMIC, Revised 05/26/2009 Page 29

30 Viewing Accounts Receivable Detail After the Generate Invoices button has been clicked, the following window will pop open to allow the accounts receivable detail to be viewed or printed. After the pop-up window has been closed, it cannot be re-created in SMART HR. However, there is a similar SMART Finance report that can be used to reprint this information at any time. If desired, SMART Finance invoices can be printed to mail out to the COBRA enrollees. The Customer Group is always C for COBRA customers created in SMART Finance by SMART HR. Region IV RMIC, Revised 05/26/2009 Page 30

31 Receipting COBRA/Retiree Payments Payments by the COBRA/Retiree participant are receipted using SMART Finance. Notice of Termination of COBRA Coverage Benefits Module Retiree and COBRA Insurance Print Notices A plan administrator that terminates COBRA coverage prior to the end of the maximum coverage period must provide a written notice of termination to each affected qualified beneficiary. If it is the employer s decision to terminate coverage you will need to print the Notice of Termination of COBRA Coverage using this window and mail it to the enrollee. There is an option to Print or Re-Print the notice. After entering this information as shown above, use the Print Notices window. Region IV RMIC, Revised 05/26/2009 Page 31

32 Choose the Notice of Termination of COBRA Coverage radio button. The window will display tracking rows for which a Term- employer decision has been entered. Select one or more one rows and click the Print button to print the notices. This will store today s date in the tracking row for future reference on the Maintain Tracking Records window and on the reports of Tracking Information. Although the Notice of Termination of COBRA Coverage can only be printed once, it can be reprinted as follows: Region IV RMIC, Revised 05/26/2009 Page 32

33 Notice of Termination of COBRA Coverage Region IV RMIC, Revised 05/26/2009 Page 33

34 180-Day Conversion Notice Benefits Module Retiree and COBRA Insurance Print Notices When a COBRA benefit plan is set up, the conversion option checkbox will usually be checked to indicate that the plan gives the participant the right to convert their group coverage to an individual plan without limitations on pre-existing conditions. All benefit plans that offer a conversion option must send out a notice to a qualified beneficiary during the 180-day period prior to the anticipated expiration of that person s continuation period. This notice must advise the qualified beneficiary of the option to enroll in a conversion product when the continuation period expires. Note: Check with your insurance companies to see if they send out these notices to COBRA participants or if it is the school district s responsibility. Run these notices monthly using this window. Click on the 180-Day Conversion Notice radio button. This window will automatically select rows that are within 180 days of the end of the continuation period (last day of COBRA coverage) based on today s date. You may select additional rows or de-select rows with usual keystrokes and then click the Print button to print the notices. This will store today s date in the tracking row for future reference on the Maintain Tracking Records window and on the reports of Tracking Information. The window will automatically select rows that are within 180 days of the end of the continuation period. You may select additional rows or de-select rows with usual keystrokes and then click the Print button to print the notices. This will also store today s date in the tracking row for future reference on the Maintain Tracking Records window and on the reports of Tracking Information. Region IV RMIC, Revised 05/26/2009 Page 34

35 Although the 180 Day Conversion Notice can only be printed once, it can be reprinted as follows: Notice of Expiration of COBRA Coverage Region IV RMIC, Revised 05/26/2009 Page 35

36 Notice of Unavailability of COBRA Coverage Benefits Module Retiree and COBRA Insurance Maintain Tracking Records A plan administrator who receives a notice of what a qualified beneficiary believes is a qualifying event must provide Notice of Unavailability of COBRA Coverage if the plan administrator determines that the individual is not entitled to continuation coverage. This is done by entering the reason for decision and the effective date of the decision on the Maintain Tracking Records window, as shown below: After entering this information as shown above, use the Print Notices window. Choose the Notice of Unavailability of COBRA Coverage radio button. The window will display tracking rows for which an Unavail- employer decision has been entered. Select one or more one or more rows and click the Print button to print the notices. This will store today s date in the tracking row for future reference on the Maintain Tracking Records window and on the reports of Tracking Information. Region IV RMIC, Revised 05/26/2009 Page 36

37 Benefits Module Retiree and COBRA Insurance Print Notices Although the Notice of Unavailability of COBRA Coverage can only be printed once, it can be reprinted as follows: The reason that was entered on the tracking row appears on the notice as shown below: Region IV RMIC, Revised 05/26/2009 Page 37

38 Notice of Unavailability of COBRA Coverage Region IV RMIC, Revised 05/26/2009 Page 38

39 Revoking a Waiver of Coverage Benefits Module Retiree and COBRA Insurance Maintain Tracking Records The qualified beneficiary may revoke their waiver anytime curing the 60-day election period. The Plan does not, however, need to provide COBRA coverage for the time period from the loss of coverage to the date of the revocation. This could result in a gap in coverage for the qualified beneficiary. If the beneficiary revokes the waiver of coverage beyond the 60-day election period they are not eligible for coverage. Always get elections or waivers in writing, keep records, give the required notices, have reasonable notice procedures, and document all conversations you have with employees regarding their continuation rights. Whenever in doubt, seek legal advice. Maintain Tracking Records Window Example Recording Enrollee Decision to Revoke a Waiver: Elizabeth waived coverage for the dental insurance. On August 16th, before the 60 day election period was up, she visited the dentist and was told she needed extensive dental work. She decided to revoke the waiver and take the dental insurance. This decision was manually entered into the Chg-Date field as 08/17/2008. In this case, the employee had signed the waiver so the coverage does not go retro-active back to 06/01/2008. Note: There is no requirement that groups must collect waivers. If employers decide not to collect waivers, they will be unable to enforce this provision of using an effective date one day later then the revocation date. Enter the Chg-Date (change date) you received the enrollee decision for coverage continuation Select the enrollee s decision from the ddlb Coverage start and stop dates are automatically assigned if the decision entered is Enrolled Coverage Use the Comments to document the conversation or reason for revoking the waiver of coverage. Document, document, document! Region IV RMIC, Revised 05/26/2009 Page 39

40 Change in Name or Correction of Misspelled Name Payroll Module MN Employee Information MN Employee Info Addnl If there is a name change to a COBRA participant or if you need to correct a typing error in a name you entered update in on the Dependents tab. You will be prompted with these two warning messages. If you need to update an address you will do that on this same tab. Changing an address does not prompt you with these two messages. Note: In the case of an address change please be sure you update the address in SMART Finance as well. Correcting a COBRA Election If you need to delete a record because you selected the wrong COBRA election go to: 1. Maintain tracking rows delete the row 2. If the notice has already been printed and the dates are recorded, you will have to delete the tracking rows, than delete the Maintain Tracking Rows. Note: You might have to change the dates or blank them out after deleting the tracking rows before it will allow you to delete the Maintain Tracking Row information. Region IV RMIC, Revised 05/26/2009 Page 40

41 Benefit Plan Setup Work Form Health Plan (Code) Start Date Description Conversion Option / / Y N Premium Credit B- Employer Debit E- Admin Fee Credit R- Admin Fee Default / / Y N Premium Credit B- Employer Debit E- Admin Fee Credit R- Admin Fee Default / / Y N Premium Credit B- Employer Debit E- Admin Fee Credit R- Admin Fee Default / / Y N Premium Credit B- Employer Debit E- Admin Fee Credit R- Admin Fee Default / / Y N Premium Credit B- Employer Debit E- Admin Fee Credit R- Admin Fee Default / / Y N Premium Credit B- Employer Debit E- Admin Fee Credit R- Admin Fee Default Region IV RMIC, Revised 05/26/2009 Page 41

42 SMART Finance COBRA Items to Review These are items to review and consider when setting up COBRA affecting the SMART Finance application. 1) Administration Fee The district needs to determine if they are going to charge an administration fee (maximum of 2%) for COBRA purposes. A revenue account code may need to be created for this purpose if the district wants to track this fee separately from other revenue activity. 2) Customer Terms The Customer Terms determines the Due Date calculation on the invoice. (Region IV districts use the term of NET30 in most cases.) This is taken from the SMART Finance Administration Application Setup Application Options AR tab. Region IV RMIC, Revised 05/26/2009 Page 42

43 This value will default in on customers created from SMART HR. The Terms appear in SMART Finance Accounts Receivable Customer Setup Customer on the Additional Information tab. The Terms value also appears on the Invoice itself. Again, the Terms will determine the calculated Due Date appearing on the invoice. Region IV RMIC, Revised 05/26/2009 Page 43

44 3) Invoice Address Logo Bitmap This will need to be built for any district that is new to invoicing so the district logo and information appears on the printed invoice. 4) Separate Balance Sheet Account The district may want to track COBRA / Retiree premium information in a separate account code from the regular employee premium data. This is certainly not necessary, but it may be a consideration. This same account code must be used when paying the vendor through the accounts payable - voucher process. 5) Write-Off Account Code The district may want to consider setting up a write-off account code for the rare instances when a customer doesn t pay the full amount of the invoice. a. This code should be entered on the Account tab of the Application Options window. Region IV RMIC, Revised 05/26/2009 Page 44

45 b. Entry of Write-Off should be flagged on the AR tab in the Application Options window allowing the district to change the write-off account code while in the receipt area. 6) On-Account Transaction Account Code The district may also want to consider setting up an On- Account account code if a customer pays ahead for premiums. However, this could be best handled using the features programmed for creating the invoices in SMART HR for those months paid ahead. Region IV RMIC, Revised 05/26/2009 Page 45