TxMike

You're speaking over my head here. All I know is the costs that the employer/client pays the PEO. The cobra rates are about 20% higher (where I can only understand 2 of the 20% increase). The medical rates are good for 1 year.

I am 100% confident in the costs that my former company paid for the medical plan to the PEO. I saw the contract and have the rate sheets for my specific plan that shows the total rate paid by the company to the PEO. The PEO said that they can not make money on selling health insurance (they are not licensed to sell health insurance), so they "passed" the cost onto the client as an actual cost. The PEOs contract breaks out the cost for each item (i.e. Salary, medical benefits, taxes, etc.) with each payroll run. What I am trying to figure out is if the PEO is charging an incorrect rate on accident or if there is a legitimate way they could be charging a higher rate if the plan is self funded. The cobra rate is about 20% higher than what my former company paid for the plan. So, it's a material difference. Thanks again for your thoughts.

It's a fairly large PEO, so the medical plan could be self funded. I don't know for sure if it's self funded. I'm not disabled. If it's self funded, is there a formula to calculate the legal amount they can charge for Cobra?

Hello - thank you in advance for trying to answer this question: I was co-employed by a PEO and know the combined employer/employee rates for Medical coverage because I have the contract between my former employer and the PEO. Therefore, when I received the Cobra notice, I was surprised that the Medical rate wasn't just 102% of the total cost of the medical plan (employer + employee). Is there something that I am missing that would allow the PEO to charge more than 102%? Thanks again.