Health reimbursement arrangements (HRAs) are subject to COBRA, just like the medical plan. When a member qualifies for COBRA, they can continue to receive the same HRA employer contributions as active employees and must be offered the
opportunity to do so.

Figuring premium is not as easy as dividing annual HRA contribution by 12 and then adding 2%...1 of 2 methods (actuarial or past
cost) are supposed to be used to determine HRA COBRA premium for ex-employees.

The ACTUARIAL METHOD, is used first by assuming a reasonable estimate of the cost of providing HRA coverage to employees and then applying a formula to create a monthly premium. Companies with a newly established HRA must use the actuarial determination method because they have no HRA claim history for the prior year.

With the PAST COST METHOD, calculating the HRA COBRA premiums are based on past HRA expenses and then applying a formula to create the premium.

First of all End Stage Renal Disease (ESRD) creates a couple of key elements related to COBRA. #1 total disability, which adds an 11 month extension to COBRA available coverage and #2 something called a 30 month coordination period, which is essentially the coordination of benefits between a group plan or COBRA and Medicare.