The COBRA notice is a large source of litigation when the plan administrator / employer does legally provide the COBRA notice to plan participants and qualified beneficiaries. Under COBRA, two notices (Not counting the HIPAA or other required documents) both the initial notice and the election notice must be sent:
in a good faith manner that is reasonably calculated to ensure actual receipt of the material.
No specific method of delivery is required in the actual law, but the DOL suggests using first-class mail.
Delivery Of COBRA Notices
The only legal duty imposed on plan administrators is to make a "good faith" attempt to notify beneficiaries of their COBRA rights. To determine if employers have complied with the COBRA notice requirement, courts examine if the notices were sent by a method "reasonably calculated" to result in receipt. Proof of actual receipt is not required. COBRA states the initial notice:
"The group health plan shall provide, at the time of commencement of coverage under the plan, written notice to each covered employee and spouse of the employee, if any, of their rights" to continuation coverage.
COBRA details about the Election Notice:
"The administrator shall notify in the case of a qualifying event…any qualified beneficiary with respect to such event, of such beneficiary's rights."
Methods used by employers and plan administrators to sending the notices to inform beneficiaries of their COBRA rights include:
. Each practice has inherent drawbacks, some more risky than others. First, we'll discuss the preferred method for delivery of COBRA notices; then we'll tell you which practices to avoid.
1st class mailing is the most reliable notification used. It shows good faith attempt which is a requirement of COBRA and with a Certificate of Mailing, proves the notice was properly given within the required time limits to the required participants. If your former employer mailed using a the Return Receipt, and you did not sign for it, that proves delivery was not made. If the notice were returned to the sender without the signature of the intended recipient, the employer should have made another or different attempt to relay the notices to the beneficiary, or at least discover their correct mailing address. The notice sent to the last known mailing address with a Certificate of Mailing is the best way to go.
Telephone notice: Courts have held phone notification as legally sufficient. ERISA, the federal law governing COBRA administration, does not require COBRA election notices to be in writing. But if the plan participant does not admit they received all the required COBRA info, the employer could be liable.
In-person conversation during the exit interview: Often, employers will inform employees in a face-to-face meeting of their right to continued health insurance under the group plan at the same time they terminate their employment. Verbal communications can have problems like the telephone notice. are ill advised. There is no independent evidence to support the employer sent the notices, unlike a Certificate of Mailing. The content of the conversation is if not impossible, to prove unless it is recorded with the employees consent. There is usually no record of the date, the accuracy of the contents of the notice, nor the identity of the individuals being notified. And verbal notices given to exiting employees do not constitute legally adequate notification of COBRA rights to covered spouses and dependents.
Hand delivery of documents at the exit interview: Sometimes employers will give former employees written COBRA election notices in person at the exit interview. But it does not guarantee legally adequate notice of COBRA rights to a covered spouse or dependents. Often in anticipation of divorce, employees will un-enroll their partner from the health plan. In anticipation of divorce, a partner may make sure eligible COBRA recipients never receive the required notices from administrator. The spouse may incurs medical expenses not knowing they should have elected their COBRA entitlement.
Email: Employee benefit plans may email COBRA notices but plan administrators must make sure the COBRA documents result in the actual receipt of the required information. Email can be sent to employees to workplace or at non-workplace addresses. Spouses and beneficiaries must consent to receive them in electronic form, and provide the email address. The employer or plan administrator provides the participants a statement that clearly says:
The documents that are permitted to be Emailed;;
You can withdraw email consent at any time;
How you withdraw consent and updating your email address;
The software and hardware requirements; and
The right to ask for and get the paper copy of any email or attachment.
Has your employer tried to comply with the minimum legal requirement to "provide" COBRA notifications to all qualified beneficiaries? Sometimes it is necessary to use multiple methods to send the notice, to avoid any legal or compliance problems. Plan Administrators must have written procedures for providing COBRA notices and those methods should be consistently used. If in doubt, the best way of sending the COBRA notice is always the USPS with a Certificate of Mailing.
Craig Casey is an Writer, Coach, Blogger, Husband, and Former Health Insurance Agent helping people on the web since 1999 with their health insurance problems.
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