Both HRAs and Self-Funded Plans typically establish a maximum claims liability limit for an employer that is rarely reached. Claims may also fluctuate from year to year, which creates challenges in developing valid COBRA premium rates.
So, where do you start? The COBRA legislation defines “applicable premium” as the cost to the plan of providing coverage to similarly situated beneficiaries who have not experienced a qualifying event. This applicable premium must be determined prior to each 12-month determination period.
Medcom Benefit Solutions works with employers to actuarially determine the appropriate COBRA premiums based upon their plan design, demographics, and prior claims history, if available. Plan sponsors should strongly consider a sound, actuarially determined method for establishing these premium rates. A plan is permitted to charge a qualified beneficiary up to 102% of the applicable premium.
Medcom Benefit Solutions provides fully certified COBRA premium rates for both HRAs and self-funded plans using the most appropriate method on a case-by-case basis.