COBRA Processing Part 1: Recognize Qualified Events and Produce Enrollment Packages

  • by Clay Molinari, SAP HR Consultant, C&C Savant, Inc.
  • May 15, 2004
SAP R/3 can help your business manage the COBRA law, which requires companies to offer health insurance to employees who have lost coverage. In the first of a two-part series, the author discusses the rules, terms, and notification process of the COBRA law.

In 1985, the United States Congress passed the Consolidated Omnibus Budget Reconciliation Act. This law, known as COBRA, requires companies that offer group health coverage to allow certain participants who lose coverage to purchase continuation coverage. R/3 Enterprise contains features designed to enable your company to easily comply with the requirements of this law. Despite this built-in functionality, many companies have either outsourced their COBRA processing or implemented custom-built solutions in R/3. This article shows how easy it is to configure R/3 Enterprise for the production of COBRA enrollment packages.

COBRA Basics

The COBRA law requires employers to notify persons who are eligible for continuation coverage of their COBRA rights. The notification must be delivered in a timely manner and it must contain instructions on how continuation coverage can be obtained. Eligible persons who wish to elect continuation of coverage must be allowed to continue their participation in the health plan for a fixed length of time. The duration of continuation coverage is different depending on the reason that the coverage was lost. This article will focus on the notification process, which involves two primary steps. The first step is to recognize that an event has occurred. The second step is to provide an accurate notice of COBRA rights to the qualified beneficiaries. The next article in the series will show how R/3 Enterprise supports the ongoing administration of COBRA participation.

In part two of this series, I explain the process of recording COBRA elections and administering the billing process.

Clay Molinari

Clay Molinari has 20 years of experience in the IT industry and has been working as an SAP HR consultant since 1997. He is currently president of C&C Savant, Inc., an SAP consulting firm that specializes in combining standard SAP configuration and custom ABAP programming to help its clients solve unique or complicated requirements.

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1/7/2015 1:51:27 PM
Ted McCann

On infotype 0211 in the event data section should the event occurred date be the last active day of the employee or the first day of lost coverage? I n our system the last active day is appearing.

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