Everything you need to know about our COBRA Software

Click here for FAQS regarding COBRA Subsidy under the American Rescue Plan Act of 2021 (H.R. 1319)

What does EverythingBenefits COBRA software do?

Our solution handles virtually all aspects of COBRA administration and opens the door to a more efficient means of tracking qualifying events and eligibility, managing premium payments, automatically monitoring coverage periods and timelines, and providing a platform that acts as a digital liaison for communication between employers and qualified beneficiaries.

Partnering with EverythingBenefits for COBRA Administration gives you access to industry knowledge experts and compliance specialists. Through our automated COBRA Administration software, we do all the tedious work for you, freeing up your business for revenue-impacting activities.

What is the benefit of using EverythingBenefits' COBRA Administration?

The main benefit is peace of mind. Our COBRA software eliminates much of the processes associated with in-house, manual COBRA administration, reduces the risk of non-compliance and the fines associated with it, and removes the awkwardness of COBRA administration for terminated employees. Using a COBRA Administration Service ultimately gets companies back to the business of their business so they can focus on revenue-impacting (and active employee) activities.

What makes our COBRA Administration solution more automated than others?

We establish an electronic bridge between our platform and our partners and automatically track and identify qualifying events/eligibility for your employees. Since most COBRA services today simply require the customer to call in when a COBRA qualifying event happens, EverythingBenefits identifies these events proactively and reacts to them, taking most of the burden of compliance off your shoulders.

What is "Mini-Cobra"?

“Mini-COBRA” (or MiniCOBRA) refers to COBRA legislation expansion at the State level, and varies by state. Most of these programs were created to extend coverage to employees in businesses with fewer than 20 employees who are not covered by COBRA under federal provisions. Roughly three-quarters (3/4) of all states have created state-specific COBRA legislation.

Some of my carriers administer COBRA.  Do all of our benefits need to be administered through EverythingBenefits?

No.  You can inform us which carriers and plans for which you need us to administer COBRA.  We do not have to take over COBRA administration for all of your plans, however, it may be easier for your organization to have everything under one COBRA TPA.

Will I need to enroll COBRA subscribers with my carriers?

No. The COBRA Team at EverythingBenefits will enroll COBRA subscribers in the plans they are eligible for, and which they choose to continue coverage. Once they are an active subscriber we notify your team so that you can expect to receive remittances for COBRA premiums paid each month.

How are COBRA subscribers informed of plan changes prior to Open Enrollment?

You should notify EverythingBenefits when you are approaching Open Enrollment and if any of your plan offerings and/or premiums are changing. We will then communicate this to your current COBRA participants and allow them to go through Open Enrollment using a simple self-service portal.

At times I need to provide evidence that a notice was delivered to an employee or a dependent.  Can this be done within EverythingBenefits?

Yes.  You are able to track the full history of communication that has occurred within the EverythingBenefits system in regard to COBRA.  When Initial Notices were sent and who they were sent to. The mailing of Qualifying Event notices can also be tracked and delivery can be confirmed within EverythingBenefits. All notifications can be viewed, downloaded, and resent as needed.

Where can I learn more about EverythingBenefits' COBRA Administration Solution

The best way to get to know our COBRA software is to schedule a DEMO for a one-on-one with our product specialist. We look forward to solving all your COBRA headaches!



COBRA Subsidy under the American Rescue Plan Act of 2021 (H.R. 1319)

On Thursday, March 11th, President Biden signed the American Rescue Plan Act into law. The newly enacted law requires that those who are entitled to COBRA coverage any time between 4/1/2021 through 9/30/2021 due to a loss of coverage under a group health plan resulting from involuntary loss of employment or reduction of hours, be provided with a full (100%) subsidy for their COBRA premium due within this period. 

As a result, eligible individuals may not be charged for a COBRA premium within this period.  Instead, the Employer can recover the government’s premium subsidy through quarterly employment tax credits as described further in the FAQs below.

Please register for our webinar on Wednesday, March 24, where we will review the new legislation and walk through its changes before it goes into effect.

In the meantime, please see frequently asked questions about the new legislation:

What is the status of the Act?
The Act has been passed by the Senate and House. President Biden signed the Act into law on Thursday, March 11, 2021.

When will the subsidy be in effect?
From April 1, 2021 through September 30, 2021.

What Types of Loss of Coverage Events Qualify for 100% Subsidy?
“Assistance Eligible Individuals” are those who lose group health coverage from involuntary loss of employment (other than by reason of the employee’s gross misconduct) or reduction of hours. For example, if an employer chooses to lay off an employee, the resulting loss of coverage would qualify.

What types of loss of coverage events do not qualify for the subsidy?
All events other than involuntary loss of employment or involuntary reduction of hours.

What types of benefits qualify for the subsidy?
Continuation coverage must be provided under a group health plan, including medical, dental and vision. Health flexible spending arrangements under a cafeteria plan do not qualify for the subsidy. 

Are qualified beneficiaries entitled to the subsidy?
Yes, Qualified Beneficiaries who lose coverage due to the involuntary loss of employment or involuntary reduction of hours of a Covered Employee are entitled to the subsidy.

Are there extended election periods?
Yes, with respect to: 

  • An individual who does not have an election of COBRA coverage in effect on April 1, 2021, but who would have been an Assistance Eligible Individual, if such election were in effect; or 
  • An individual who elected COBRA coverage but discontinued from coverage prior to April 1, 2021, either such individual may elect COBRA coverage for up to 60-days following their receipt of notice of this election period.   

Can employers allow assistance eligible individuals to enroll in another group plan offered by the employer?
Yes, employers have the option of allowing Assistance Eligible Individuals 90-days to enroll in another group plan offered by the Employer as long as the premium for the different plan does not exceed the premium for the plan which the individual was enrolled at the time. 

Who is entitled to receive the subsidy?

  • The PEO for Multi-Employer Group Plans
  • The Employer if otherwise subject to COBRA (or other federal coverage continuation laws) and the Employer for either partially- or completely- Self-Funded Group Plans; and
  • The Insurer for Fully-Funded Group Plans not otherwise subject to COBRA (or other federal coverage continuation laws) (i.e., fully funded group plans for employers with less than 20 employees)

How is the subsidy received?
The PEO/Employer/Insurer is entitled to a credit on employment taxes up to the amount of any such employment tax imposed for the calendar quarter.  If the amount of the credit owed exceeds the amount of the employment tax imposed, the PEO/Employer/Insurer will be entitled to a refund of that amount from the federal government as an "overpayment.  An advance of the credit owed (including any anticipated overpayment refundable amount) can be sought through the end of the most recent payroll period.

What about the 2% administrative fee?
As a part of COBRA compliance requirements and to cover additional administrative activities including notice mailings, reinstatements and more, EverythingBenefits will invoice its 2% administrative fee to the PEO/Employer who can recoup such fee in the subsidy received from the government. In other words, the PEO/Employer will be responsible for paying the administrative fee upfront but may seek tax credit or overpayment refund from the government of the full 102% premium paid.

What happens to existing COBRA participants?
Existing COBRA participants whose prior Qualifying Event was due to involuntary loss of employment or involuntary reduction of hours, and who would have a premium payment due between April 1, 2021 and September 30, 2021, will be entitled to a full subsidy for their COBRA coverage falling within those months.  

Does the Act extend the amount of time available for COBRA coverage?
No, the Act does not change the maximum amount of time available for COBRA Coverage.

What happens if an assistance eligible individual pays for COBRA coverage between April 1, 2021 and September 30, 2021?
Such individuals must be reimbursed by the PEO/Employer/Insurer (as applicable) within 60 days of their payment.

What notices need to be issued regarding these changes and is there a penalty for non-compliance?

Plans/Administrators shall issue:  

  • Election notices or a supplement to election notices, which advice of the premium assistance. 
  • The option to enroll in a different plan if provided by the Employer. 
  • Notice of extended election periods;
  • Notice of expiration of premium assistance period. 

Will EverythingBenefits send initial election paper notices?
COBRA ARPA initial election paper notices will be sent by EverythingBenefits at an additional cost.

How will EverythingBenefits know which employees are eligible for assistance under this plan?
EverythingBenefits will contact its COBRA clients and request to electronically classify prior loss of employment or reduction of hours COBRA qualifying events as voluntary or involuntary before April 1, 2021. For the purpose of avoiding risk of noncompliance, after April 1st, loss of employment or reduction of hours may be defaulted to non-voluntary when not otherwise marked by the Employer.

What will happen to employees who had a qualifying event before April 1st?
Employers will need to audit their records back to 10/1/2019 to determine whether any employees were involuntarily terminated or had their hours reduced and contact EverythingBenefits to address notifying such individuals of their COBRA rights under this law.

What should I expect from my COBRA Carrier as an Employer?
Employers will need to pay for the full cost of the COBRA coverage for eligible individuals to the Carriers and may recoup that cost through quarterly employment tax credits.  It will be the Employer’s responsibility to ensure the premium payments are timely paid and coverage does not lapse.

Why must Employers go back to 11/1/2019 to reclassify all employee terminations or reductions of hours since 11/1/2019 as voluntary or non-voluntary?
COBRA eligibility period spans 18 months. If an employee lost coverage at any time prior to the span of the subsidized period but within 18 months of eligibility period, they may be eligible for subsidy. If the loss of coverage is reclassified as non-voluntary, they will be given the opportunity to elect coverage from April 1, 2021 through the end of their original coverage period, if they have not previously elected or allowed their prior election to lapse. 

Has the Department of Labor issued Model Notices?
Yes, DOL's Model Notices can be found here: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy-for-employers-and-advisers.

Has the IRS issued guidance regarding the subsidy and collecting corresponding tax credits?
Yes, the IRS's ARPA Guidance can be found here: https://www.irs.gov/pub/irs-drop/n-21-31.pdf.

The information in this email was sourced from Title IX, Subtitle F, Sec. 9501 of the American Rescue Plan Act of 2021, H.R. 1319.

EverythingBenefits provides industry updates and content as a service to its clients and readers. EverythingBenefits does not provide legal advice or tax advice and cannot guarantee the accuracy of its content for a particular purpose. You are encouraged to consult with legal counsel and tax professionals to ensure your compliance with all applicable laws and regulations.

Last updated, June 24, 2021



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