Cobra Management Fees:
Here’s a breakdown of the COBRA management fees associated with employee dismissals:
When an employee is terminated, they are offered COBRA insurance coverage. For PEO clients, COBRA benefits are managed through Niural PEO and are billed at the premium + 2%, which is then remitted to the carrier. In addition to this, Niural charges a separate management fee to the company to maintain and manage the COBRA coverage.
Please note that these management fees are outlined in the client contract, so be sure to verify the specific fee structure before communicating this information to your client.
For Active PEO Clients:
The COBRA management fee is the PEPM (Per Employee Per Month) fee, plus the COBRA premiums at the rate of the premium price + 2%
For Non-Active PEO Clients:
This applies specifically to clients who were active PEO clients when the employee enrolled in COBRA, but have since moved to another payroll service without transferring the COBRA coverage to the new provider. In this case, the management fee is a $400 PEPM fee, in addition to the COBRA premiums + 2%, with this being billed in advance. However, please note that this scenario is rare, as clients leaving Niural should transfer COBRA coverage to their new payroll provider.