How is this different from The “Big Moving Parts” of a COBRA Administration Business we talked about in our last post?  As Neil Diamond wrote in I Am…I Said, “Well except for the names and a few other changes if you talk about me, the story’s the same one.”  This ultimately is the whole point.  The business of running a COBRA administration business is almost identical to the business of running a non-COBRA continuation individual direct bill administration business, i.e. retiree health insurance billing, leave of absence health insurance billing, carrier individual policy holder billing, non-COBRA church plan health insurance continuation, etc.  The potential list goes on and on.  We even have customers talking about performing regular tithing billing for large churches and their parishioners via scheduled ACH.  This is why Benaissance offers two complete stand alone systems – COBRApoint for COBRA and SPMpoint for individual direct billing – but we can deliver them as one fully-integrated system.  By the way “SPM” stands for “Special Plan Member.”

The one big difference is obviously #7 in our prior post, as “COBRA Administration” needs to be replaced with “Customizable Individual Direct Bill Administration.”  Otherwise the differences are rudimentary.  In #2, “Capturing Data”, for example, instead of capturing data about new hires and new QBs, you need to capture data about new direct bill participants.  So, here is the new #7.

7. Customizable Individual Direct Bill Administration – When administering COBRA, we all follow more or less the same basic rules regarding billing.  QB’s are offered COBRA for a given period of time mandated by COBRA and/or applicable state laws, and they pay monthly with a 30-day grace period.  When they reach the end of their continuation period or if they don’t pay on time, they’re terminated.  For individual direct billing though, the core technology platform needs to support customizing the billing rules for each client or even for different “plans” within a client.  So, multiple billing frequencies must be supported – weekly, bi-weekly, monthly, quarterly, or annually.  Grace periods must be able to be customized per billing frequency, or sometimes grace periods need to be ignored and not enforced.  Admin fees which are tacked onto a QB’s monthly premium under COBRA are pretty universally set at 2%, but in individual direct billing they may be any flat amount or percentage and they may be split where part of an admin fee is bookable (retained by the administrator) and part of it is remittable (passed on to the client).  A completely different letter set is required, and they must be easily customized for each client or even client division.  The key is that all of this customization should be configured within the technology platform.  Once this customization is then set up and enforced by the platform, the operational processes within the administrator’s business are the same as they are when performing COBRA administration.