Frequently Asked Questions

Under COBRA, participants, covered spouses and dependent children may continue their plan coverage for a limited time when they would otherwise lose coverage due to a particular event, such as divorce (or legal separation). A covered employee’s spouse who would lose coverage due to a divorce may elect continuation coverage under the plan for a maximum of 36 months. A qualified beneficiary must notify the plan administrator of a qualifying event within 60 days after divorce or legal separation. After being notified of a divorce, the plan administrator must give notice, generally within 14 days, to the qualified beneficiary of the right to elect COBRA 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.

A short pay notice is mailed to the COBRA participant. The notice informs the participant that they have until the end of their 45-day (initial payment) or 30-day (consecutive payment) window to make full payment. If full payment is not received by the deadline, the payment will be returned to the participant and steps will be taken to terminate coverage.

The week following month-end, NueSynergy will mail a COBRA Participant Report to each client. The report lists all participants and check amounts received for the previous 30 days. Additionally, clients receive a check issued by NueSynergy for the collective amount of all COBRA payments received the prior month. Payments may reflect coverage for three to four months back, due to variances in election period and payment schedules.

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.

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.

Once the Request for Termination is received by NueSynergy, election forms are mailed to the participant within one to two business days. COBRA law allows 14 days for a COBRA administrator to provide the election forms, but our internal process allows for a much quicker turnaround.

As soon as full payment is received, NueSynergy will alert the employer so that coverage can be reinstated. From the point of reinstatement it could take the carrier up to seven to 10 days before coverage is actually activated in the system.

To be eligible for COBRA coverage, you must have been enrolled in your employer’s health plan when you worked and the health plan must continue to be in effect for active employees. COBRA continuation coverage is available upon the occurrence of a qualifying event that would, except for the COBRA continuation coverage, cause an individual to lose his or her health care coverage.

In order to be entitled to elect COBRA continuation coverage, your group health plan must be covered by COBRA; a qualifying event must occur; and you must be a qualified beneficiary for that event. Plan Coverage – COBRA covers group health plans sponsored by an employer (private-sector or state/local government) that employed at least 20 employees on more than 50 percent of its typical business days in the previous calendar year. Both full- and part-time employees are counted to determine whether a plan is subject to COBRA. Each part-time employee counts as a fraction of a full-time employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full time.

Qualifying Events – Qualifying events are events that cause an individual to lose his or her group health coverage. The type of qualifying event determines who the qualified beneficiaries are for that event and the period of time that a plan must offer continuation coverage. COBRA establishes only the minimum requirements for continuation coverage. A plan may always choose to provide longer periods of continuation coverage.

The following are qualifying events for covered employees if they cause the covered employee to lose coverage:

Termination of the employee’s employment for any reason other than gross misconduct; or

Reduction in the number of hours of employment.

The following are qualifying events for the spouse and dependent child of a covered employee if they cause the spouse or dependent child to lose coverage:

Termination of the covered employee’s employment for any reason other than gross misconduct;

Reduction in the hours worked by the covered employee;

Covered employee becomes entitled to Medicare;

Divorce or legal separation of the spouse from the covered employee;

or Death of the covered employee.

In addition to the above, the following is a qualifying event for a dependent child of a covered employee if it causes the child to lose coverage: Loss of dependent child status under the plan rules. Under the Patient Protection and Affordable Care Act, plans that offer coverage to children on their parents’ plan must make the coverage available until the adult child reaches the age of 26. Qualified Beneficiaries – A qualified beneficiary is an individual covered by a group health plan on the day before a qualifying event occurred that caused him or her to lose coverage. Only certain individuals can become qualified beneficiaries due to a qualifying event, and the type of qualifying event determines who can become a qualified beneficiary when it happens. A qualified beneficiary must be a covered employee, the employee’s spouse or former spouse, or the employee’s dependent child. In certain cases involving the bankruptcy of the employer sponsoring the plan, a retired employee, the retired employee’s spouse or former spouse, and the retired employee’s dependent children may be qualified beneficiaries. In addition, any child born to or placed for adoption with a covered employee during a period of continuation coverage is automatically considered a qualified beneficiary. An employer’s agents, independent contractors, and directors who participate in the group health plan may also be qualified beneficiaries.

Your group health plan can require you to pay for COBRA continuation coverage. The amount charged to qualified beneficiaries cannot exceed 102 percent of the cost to the plan for similarly situated individuals covered under the plan who have not incurred a qualifying event. In determining COBRA premiums, the plan can include the costs paid by employees and the employer, plus an additional 2 percent for administrative costs.

For qualified beneficiaries receiving the 11-month disability extension, the COBRA premium for those additional months may be increased to 150 percent of the plan’s total cost of coverage for similarly situated individuals. COBRA charges to qualified beneficiaries may be increased if the cost to the plan increases but generally must be fixed in advance of each 12-month premium cycle. The plan must allow you to pay the required premiums on a monthly basis if you ask to do so, and the plan may allow you to make payments at other intervals (for example, weekly or quarterly). The election notice should contain all of the information you need to understand the COBRA premiums you will have to pay, when they are due, and the consequences of late payment or nonpayment.

When you elect continuation coverage, you cannot be required to send any payment with your election form. You can be required, however, to make an initial premium payment within 45 days after the date of your COBRA election (that is the date you mail in your election form, if you use first-class mail). Failure to make any payment within that period of time could cause you to lose all COBRA rights. The plan can set premium due dates for successive periods of coverage (after your initial payment), but it must give you the option to make monthly payments, and it must give you a 30-day grace period for payment of any premium.

You should be aware that if you do not pay a premium by the first day of a period of coverage, but pay the premium within the grace period for that period of coverage, the plan has the option to cancel your coverage until payment is received and then reinstate the coverage retroactively back to the beginning of the period of coverage. Failure to make payment in full before the end of a grace period could cause you to lose all COBRA rights. If the amount of a payment made to the plan is incorrect but is not significantly less than the amount due, the plan is required to notify you of the deficiency and grant a reasonable period (for this purpose, 30 days is considered reasonable) to pay the difference. The plan is not obligated to send monthly premium notices.

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.

Yes, if you can change your contribution amount monthly if you need to, depending on if you’ll be traveling or if you’ll use other ways to get to work.

Eligible employees elect how much they want to contribute on a pre-tax basis to one or both of the plans and then use the NueSynergy benefits card for approved expenses as they are incurred. You may also submit claims for reimbursement of expenses if you are unable to use your card.

Eligible employees complete and return an enrollment form prior to the beginning of the plan period. This “election” is divided into equal installments that are payroll deducted on a pre-tax basis each pay period. Participants then use the prepaid benefits card or submit requests and receive reimbursements for approved expenses incurred throughout the plan period, as needed.

Participants may pay for certain parking, mass transit and/or vanpooling expenses with pre-tax dollars. Each dollar that goes into the plan is free from federal, state and (in most cases) Social Security taxes.

Participants can fax or mail claims and supporting documentation for their parking expenses directly to NueSynergy. You may also submit claims online through the participant online portal. Supporting documentation can be a receipt, a bill, and/or a signed affidavit validating the submitted expense. After the claim has been reviewed and the expense approved, payment is then issued to the participant via direct deposit or a check. Claims are processed daily and payments are issued at least once per week. Mass transit expenses must be paid for using the NueSynergy benefits card.

Eligible expenses are parking, mass transit and/or vanpooling expenses incurred by a participant for the purpose of commuting to and from a place of work. Spouse and/or dependent commuter expenses are not eligible. Expenses submitted through this benefit cannot be resubmitted through an income tax return.

Parking must be on or near the premises of the participant’s employer or on or near a location from which the participant commutes. Parking on or near property used by the participant for residential purposes is not permitted. Metered parking is permitted. Mass transit/vanpooling expenses must be incurred through public transportation or by a carpool or vanpool service.

Tolls

Taxis

Gas/fuel

Mileage

Business trip costs

Airport parking fees

Parking fees at your home

If a participant terminates employment, participation in the plan will also terminate.

Commuter benefits help you to pay for the public transportation, vanpool, or parking that you need to get to and from work with pre-tax money – money you deduct from your paycheck before you pay taxes. Vanpool applies to transit with more than five passengers and parking benefits must be used for parking at or near work, or at or near a place where you take public transportation to work (such as at a Park and Ride).

In most cases, you can sign up any time—the benefit will be effective for the first month possible after you make your election.

No. You can be reimbursed for expenses provided by an individual providing care for your dependent in your home as long as the expenses are incurred for you and your spouse (if married), to work, look for work or attend school full-time.

Yes, you may be reimbursed for expenses incurred for you, your spouse and any IRS dependents, regardless of where you are insured. For example, you might have coverage through your spouse’s employer’s plan (rather than your employer’s) and you may still submit your family out-of-pocket expenses to be reimbursed under the Health FSA.

Yes, an adult may qualify as a dependent provided that the employee is providing more than half of that individuals support for the year, and the dependent lives with the employee and is physically and/or mentally incapable of caring for him/herself.

Once you make an election, you may not change your election unless you experience an IRS “Change in Status” or “qualified life event.” If you do experience a qualified life event or change in status (such as marriage, adoption, divorce, etc.) your election change must be consistent with the Change in Status event. For example, if you adopt a child then you may increase your Dependent Care FSA election due to the newly eligible dependent.