COBRA Audit?????

[Guest Regina Lightner]

I have been to several seminars and have read several articles which recommend that companies have their COBRA procedures audited periodically. My problem is that I can't find an independent firm who does this. I can only find insurance brokers and COBRA administration firms. I don't want to be "sold" insurance or COBRA administrative services. Does anyone know a firm that does an objective COBRA audit?

[Linda]

You may want to use an employee benefits lawyer for this. Make sure you are working with someone who knows health plans. (Some benefits lawyers seem to specialize in retirement plan issues.)

[Guest Regina Lightner]

Thanks, Linda. We try to avoid using our employee benefits attorney for things like this because he charges us a lot of money even if he doesn't know the subject matter very well. Do you know a firm that specializes in COBRA audits (law firm or otherwise) that will not charge us an arm and a leg?

[Guest Jenny Littlejohn]

We had very similar troubles locating an auditor, but got recommendation from our attorney. I have misplaced the auditor's business card, so I can't give you a contact name and phone number. The firm name is BMI Audit Services and their web site at cobraaudit.com should provide you with phone numbers, e-mail access, etc. They did an outstanding job. Our COBRA methods underwent a complete overhaul as a result of the audit, but it was worth the effort. We were doing a lot of things wrong even though our insurance company was telling us that we were ok. Good luck!

[Guest BENEFISH]

I've never even thought about having a COBRA audit done. Is that something others are doing? thinking about doing? I'd also like to know what is involved and what an audit costs? Anyone know?

[Guest Charlie Stevens]

COBRA audits are a good idea and, while I may be biased about this, I believe that a knowledgeable employee benefits lawyer, who has done COBRA audits in the past, is the best bet. Your purpose is to avoid legal liability for failure to comply with COBRA and a lawyer who has not only drafted and audited COBRA compliance programs but who also defends employers who get into trouble is the best source of advice in this area. Finally, this should not cost an arm and a leg, because a knowledgeable lawyer is also an efficient one. This could be viewed as a "risk management expense" similar to an insurance premium.

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Charlie Stevens

Michael Best & Friedrich LLP

[Linda]

The scope of a COBRA audit can vary. Generally, I look at a company's notices, election forms, any written procedures and the group health plan SPD(s). (I don't necessarily need to read an entire SPD but I like to see the context of the explanation of COBRA and how COBRA is coordinated with other extensions of coverage the company might offer.) A COBRA audit would also include conversations with the staff about their practices and difficulties. Often, a COBRA audit is part of a larger project involving an audit or redesign of a company's group health plan.

I think it is a good idea to revisit COBRA forms and procedures this year in light of the new COBRA regulations which will be effective next year.

[Guest BENEFISH]

Sounds like the lawyers think a COBRA audit is a good idea. From some of the other messages I am reading, it sounds like there are a lot of confused benefits professionals administering COBRA on a daily basis. Are there any HR and/or benefits professionals who are as worried about this as I am? Any who plan to hire an auditor? I'm just benefishin'.

[Guest ScottN]

I advise a lot of clients to use an independent Cobra TPA. In many cases it is an inexpensive method of transferring a large liability to another party. I also use a manual from the Employee Benefits Institute of America titled "Cobra: The Developing Law". Web address: www.ebia.com. The manual includes sample documents, notification letters, etc. It is very comprehensive.

[Kirk Maldonado]

I haven't seen the EBIA treatise, but the "Mandated Health Benefits - The COBRA Guide" published by Thompson Publishing Group is the best treatise on any employee benefit topic I've ever seen. It's unique advantage is that it is equally good for the novice or an extremely experience practitioner.

[Guest Regina Lightner]

I have enjoyed reading the responses to my original message. One last appeal---I don't want to hire a TPA for COBRA because we don't perceive that there is enough value in their service. Interestingly enough, Kirk, we do subscribe to Thompson's "Mandated Health Benefits-The COBRA Guide". Their advice to seek a periodic, independent COBRA audit was what convinced me to begin this search. It looks like a lawyer or this cobraaudit.com are my best options?

[Guest Jack Hill]

I have used an independent audit firm for both COBRA and claims and operational reviews. The name of the firm is Health Benefit Consulting Inc. and the President of the firms name is Kathy DelFavero. You can reach her at 630-357-1753. Wish you the best.

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Jack Hill