Form 1099-SA notifies the IRS of distributions made from your HSA during the tax year. Form 5498-SA notifies the IRS of contributions made to your HSA during the tax year. These forms will be available electronically for your NueSynergy HSA and can be found online under "Tax Forms" within the "My HSA" section.
HOW WE CAN HELP
The COBRA administration specialists at NueSynergy will generate and mail the required notifications following the initial notice, as well as track, document and update all COBRA-related events. We also provide and maintain the necessary documentation to respond to an Internal Revenue Service audit of your COBRA practices.
The law identifies four distinct groups who are COBRA eligible.
- Employees and their families who lose coverage because of a covered employee’s termination or reduction in hours
- Dependent children who lose coverage once they exceed the plan’s age limit for eligibility
- Spouses and dependent children who lose coverage as a result of divorce, legal separation or death of a covered employee
- Spouses and dependent children who lose group coverage because the covered employee became entitled to Medicare
In certain cases involving bankruptcy of the employer, COBRA coverage may even be available for retired employees, their spouses and dependent children.
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|Anyone covered under a group health plan on the day before an event that causes loss of coverage including:
Ref. United State Department of Labor
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
Healthcare Plans | Medical Spending Accounts | Dental Plans | Vision Plans
Hearing Plans | Prescription Drug Plans | Alcohol & Substance Abuse Plans | Mental Health Plans
Life insurance | Disability insurance | Retirement plans | Vacation plans
|COMMUNICATION & TIMING|
Covered employees and covered spouses must be notified of their initial COBRA rights when they first join the plan.
Covered individuals must be notified of their election rights to continue coverage after a qualifying event occurs.
Employers have 30 days to notify the plan administrator (NueSynergy) when a loss occurs for any of the reasons listed above, except for divorce and change of status by a dependent. In those two instances, you have 60 days to notify the administrator. NueSynergy then has 14 days after notice from the Employer to notify the person who is entitled to COBRA coverage.
These are events that cause an individual to lose their group health coverage. The type of qualifying event determines who the qualified beneficiaries are and the period of time that a plan must offer continuation coverage.
Qualifying events for covered employees if they cause the covered employee to lose coverage:
Qualifying events for a spouse and/or dependent child of a covered employee if they cause the spouse or dependent child to lose coverage:
Qualifying event for a dependent child of a covered employee if it causes the child to lose coverage:
The amount a COBRA participant or their qualified beneficiaries are charged will not exceed the total costs paid by the employee and the employer, plus an additional 2 percent for administrative costs. The COBRA participant is typically responsible for paying the costs associated with COBRA continuation coverage.
When electing continuation coverage, the COBRA participant is not required to send any payment with their election form. They are required, however, to make an initial premium payment to NueSynergy within 45 days after the date of their COBRA election (that is the mail date on the election form, if using first-class mail). Failure to make any payment within that period of time could cause the COBRA participant to lose all COBRA rights.
NueSynergy will send a payment booklet with set premium due dates for the remaining months within the plan year. The COBRA participant will make their monthly premium payments by mailing a check or online with a credit card.
When the current group plan renews, an open enrollment notice with new plan rates and new payment book is sent to the COBRA participant should they choose to remain on COBRA continuation coverage.
Note: Some employers may subsidize or pay the entire cost of health coverage, including COBRA coverage, for terminating employees and their families as part of a severance agreement. If you are receiving this type of severance benefit, talk to your plan administrator about how this impacts your COBRA coverage or your special enrollment rights.
• Change in legal marital status (marriage, death of spouse, divorce, legal separation, annulment)
• Change in number of tax dependents (birth, death of dependent, adoption or placement for adoption)
• Change in dependent’s eligibility
• Change in employment status of employee, spouse or dependents
• Other changes that may permit an election change under the Dependent Care FSA are:
○ Change of dependent care provider
○ Change of rate charged by unrelated dependent care provider
○ Child attaining age 13
Election changes must be consistent with the event. If you experience a Change in Status, please review your Summary Plan Description, as it will provide you with important information on the deadline for reporting this event.
If year-to-date contributions exceed the amount of reimbursements and there is a remaining balance, the employee has a COBRA election available for the remainder of the plan year. If they do not elect COBRA, then expenses can only be submitted up to the end of their termination run-out period after which and funds remaining would be forfeited.
COBRA, which stands for “Consolidated Omnibus Budget Reconciliation Act,” is a federal law that requires group health plans to provide a temporary continuation of group health coverage that otherwise might be terminated due to certain specific “qualifying events.”
COBRA requires continuation coverage to be offered to covered employees, their spouses, former spouses, and dependent children when group health coverage would otherwise be lost COBRA is often more expensive than the amount that active employees are required to pay for group health coverage since the employer usually pays part of the cost of employees' coverage and all of that cost can be charged to individuals receiving continuation coverage.
The law generally applies to all group health plans maintained by private-sector employers with 20 or more employees, or by state or local governments. The law does not apply to plans sponsored by the Federal Government or by churches and certain church-related organizations.
In addition, many states have “state continuation” laws similar to COBRA, including those that apply to health insurers of employers with less than 20 employees (sometimes called mini-COBRA). Check with your state insurance commissioner's office to see if such coverage is available to you.
As most employers know by now, companies with 50 or more full-time equivalent employees are required to offer affordable health coverage that provides minimum value to their full-time employees starting in 2015 or face a significant penalty.
This article provides an overview of the impact to your Health Savings Account “HSA” upon termination of employment. It is not a comprehensive reference and should be reviewed in conjunction with your employer’s benefit materials and plan documents.