This article provides an overview of the Ameriflex Employer COBRA Processing Fee, including how it is calculated and its impact on your remittances. It is designed to help employers understand the structure of this operational fee and see a practical example of how it applies to monthly premiums.
Overview
Ameriflex applies an Employer COBRA Processing Fee to support the ongoing maintenance, security, and operational compliance of our COBRA administration platform. This fee is assessed directly on employer premium remittances and does not impact or increase the costs for your active COBRA participants.
How It Works
The processing fee is calculated as a percentage of the base COBRA premium in accordance with your organization's service agreement.
Participant Payments: Participants continue to pay their standard premium, which typically includes the standard statutory 2% COBRA administrative fee.
Employer Remittance: Ameriflex automatically deducts the processing fee from the base premium amount before remitting the final funds back to the employer.
Illustrative Example
To see how this applies to your monthly distributions, here is a breakdown based on a hypothetical $100 base premium:
| Item | Amount | Description |
| Base Premium | $100.00 | The baseline cost of the health plan coverage. |
| Participant Pays | $102.00 | Includes the base premium plus the standard 2% statutory administrative allowance. |
| Ameriflex Processing Fee (3%) example | $3.00 | Calculated as 3% of the $100 base premium. |
| Employer Receives | $97.00 | The net remittance sent to the employer after the processing fee is deducted. |
Frequently Asked Questions | |
| Question: Do I need to pay an extra invoice for this fee? | Answer: No. The fee is automatically deducted during your standard monthly remittance cycle, meaning no manual tracking or separate payments are required on your end. |
| Question: Can I pass this 3% fee onto the COBRA participants? | Answer: No. Under federal guidelines, the maximum amount that can be charged to a standard COBRA participant is 102% of the premium cost. The processing fee is an employer-level operational fee and cannot be added to the participant's responsibility. |
| Question: Does this change what my former employees have to pay? | Answer: No. This fee is strictly an employer-level administrative fee. Your COBRA participants will not see any changes to their premium rates or experience any additional charges due to this processing fee. |
| Question: Where can I see these deductions reported? | Answer: All processing fee deductions will be clearly itemized in your monthly Ameriflex Remittance Reports. |
| Question: Is this a new fee? | Answer: The Employer COBRA Processing Fee applies according to the terms of your current Ameriflex service agreement. If you have questions regarding when the fee became effective for your organization, please refer to your terms and conditions agreement. |
| Question: How is this different from the participant's 2% administrative fee? | Answer: The Employer COBRA Processing Fee is separate from the participant administrative fee permitted under COBRA regulations. The participant administrative fee is paid by the COBRA participant as part of their premium payment. The Employer COBRA Processing Fee is applied separately to employer premium remittances. |
| Question: Why does the remittance amount differ from the premium amount? | Answer: The Employer COBRA Processing Fee is applied to COBRA premium remittances and deducted before funds are remitted to your organization. This deduction may result in a difference between the gross premium remittance amount and the net amount received. Any applicable processing fee deductions will be reflected in your remittance reporting. |
| Question: Why is the fee deducted from remittance instead of invoiced separately? | Answer: The Employer COBRA Processing Fee is structured as a remittance-level fee and is applied to COBRA premium remittances rather than invoiced separately. As a result, the fee appears as a deduction from the remittance amount instead of as a separate invoice. |
| Question: Where can I verify if this fee applies to my company? | Answer: You can verify whether the COBRA processing fee applies to your company by reviewing your annual Terms and Conditions, where the applicable fee language is outlined. Additionally, if the fee applies to your organization, it will be reflected on your monthly remittance report. |