COBRA Compliance can be Complex: Tips for Mitigating Risk with Clarity COBRA

employees around a computer


COBRA compliance can be complex, confusing and tedious a recipe for costly mistakes. Violations cause costly penalties and liabilities. ERISA regulations also now allow for personal liability to be imposed on the employer for COBRA violations.

Brokers can guide their clients away from risk and towards success with the right tools. Clarity’s COBRA software solution offers proven best practices to help employers mitigate risk, contain health care expenses and relieve their administrative workload.

Here are some tips for utilizing those best practices and technology tools to mitigate COBRA risk:

1. Automate compliance workflows

Automating important compliance tasks makes sure they’re taken care of immediately and done accurately. For example, an automated software solution can be set to execute and track a series of actions for COBRA qualifying events. That way, your clients can be sure that no deadline goes missed and no documentation is forgotten.

So when a qualifying event happens, such as loss of dependent status, the proper paperwork and document are executed without manual effort. The system will also automatically keep track of the date initiated, the enrollment window and coverage expiration. Your clients won’t have to worry about whether they are in compliance because it will be taken care of for them.

2. Automate billing and collecting premiums monthly

Collecting premiums is an important part of making sure COBRA is handled correctly. However, manually billing and collecting premiums is time-consuming and tedious, which leaves a lot of room for error.

Automating the process allows employers to customize how they want to collect payments and gives individuals the option to automatically withdraw their premiums every month. Even if individuals aren’t on auto-pay, they will still have automatically-generated bills sent out on time every month.

3. Track properly

Imagine the looks on your clients’ faces when you tell them they can delete their spreadsheets and throw out their paperwork folders! Maybe not all of them, but the ones they use for tracking COBRA items.

Clarity’s COBRA services improve tracking and can help your clients mitigate risk by:

  • Sending qualifying event notifications
  • Following bad address process for undeliverable mail
  • Providing collections for bad checks
  • Sending termination and conversion letters
  • Processing extensions

...and so much more, all while keeping detailed records of all actions. In the case of any questions, issues or audits, there will be a detailed tracking record of all activity.

4. Manage ongoing validation

Managing the validation of COBRA elections is essential and mistakes can lead to costly penalties. It’s also tedious and can take up a lot of time. Having an automated system that can manage ongoing validation of elections can ensure that all boxes are checked and nothing slips through the cracks.

5. Work with vendors who take security and compliance seriously

Lastly, it’s important to work with vendors that value security and uphold compliance. Choose companies that provide their security policies and are HIPAA certified.

Clarity’s COBRA software solution makes it easy to mitigate the risks that come along with COBRA administration. With automated notifications, customer support, employee billing, reporting capabilities and self-service tools, you and your clients will have everything they need to free up HR resources while mitigating COBRA risk.