Termination of Employees

When an employee is terminated (for any reason other than Gross Misconduct), it is necessary to send the employee and each dependent covered under the plan (all of which are referred to as Qualified Beneficiaries) a COBRA Election Notice.  Providing the COBRA Election Notice is the single most critical step in COBRA administration. If the COBRA Election Notice is not properly provided the election period will not start to run and the Qualified Beneficiary will have an open-ended right to elect COBRA. 

When you terminate an employee in the TCO system, the proper COBRA Election Notice is automatically generated along with the HIPAA mandated Certificate of Creditable Coverage.  Both of these documents are mailed to the employee’s home address via First Class with Proof of Mailing documented by the United States Postal Service. 

You will also have to send notice of the termination of employment to the appropriate carrier(s).  Don’t forget the Senate Bill 51 deadlines for terminations if you are a fully insured plan. 

To terminate an employee in the TCO/BPM system simply follow these steps:

1.  Log into the system using your Group Name, User Name, and Password

2.  Click on Accept to acknowledge the general disclaimer

3.  Click on Administer Company

4.  Click on Participants

5.  Click Search (You may search by any criteria listed or leave blank)

6.  To the left of the employee’s name click on View

7.  Verify the employee’s address to the best of your company’s knowledge – if the address is incorrect you must make the necessary address changes on this screen and click Submit before proceeding.  Return to this screen to continue with the termination.

8.  Verify that the employee is either linked to benefits or benefits are waived. 

9.  Click on Terminate Employee

10. Make sure the correct date is inserted in the Termination Date field.  This is the date of termination of employment, not the date on which benefits are lost.

11. Number of Months Employer Paid Cobra is normally “None.”  Contact the complianceofficer@tboiservices.com if you have any questions about this field.

12. Select the correct Termination Reason.  Usually simply Termination of Employment.

13. Optionally add any notes you wish to add in the Notes section.

14. If you are sure you wish to terminate this employee Click yes.

Please note the employee’s termination will not automatically appear in the system!  An email is immediately sent to you acknowledging the fact that you have terminated the employee.  You should retain this email acknowledgement for your records. Once we have confirmed the processing of the COBRA Election Notice and the Certificate of Creditable Coverage the new employee will appear in the system as Pending COBRA.  Please see the section below entitled “What Are The Consequences for Failing to Comply” to see how important it is to terminate employees in a timely fashion.

If a QB elects COBRA there are a couple of options that TCO informs you of: 

1.  If the QB elects COBRA and sends payment with the Election we will notify you that we have received both the Election and the payment and then you should reinstate the QB’s coverage with the carrier.

2.  If the QB elects COBRA and does not send payment, we will notify you that we have received the Election but no payment and that you should not reinstate coverage until payment is received.  The QB has an initial grace period of 45 days beyond the date of the COBRA election postmark in which to bring their COBRA payments current.  If we subsequently receive payment within the 45 days we will notify you to reinstate coverage.