Healthcare Law

COBRA Coverage

Existence of COBRA coverage, with all of its deadlines and mind-numbing rules, creates headaches for providers, but managed effectively, also provides reimbursement unavailable without the coverage.
Plans required to offer COBRA also see it as a headache, but for the opposite reasons. Plans want to avoid extra reimbursement and they adroitly use the complex laws and regulations to do so. In order to effectively combat plans attempting to shirk COBRA obligations, providers must be alert to COBRA laws.
Here are a few things to watch for:

  • Premium increases—plans can charge up to 102% of the actual cost of coverage; however, premiums cannot be increased more than once annually and excessive increases are prohibited
  • Changing policy numbers—plans often change the policy numbers on COBRA policies, making it extremely difficult to verify coverage and pre-authorize treatment
  • Improper notice of status—plans that terminate coverage before the grace period are required to tell inquiring providers that there is no coverage but coverage will be reinstated if premiums are paid within the grace period; plans that do not terminate coverage before the grace period ends are required to tell inquiring providers that coverage will be terminated if no payment is made within the grace period
  • Early termination—coverage can only be terminated in certain circumstances