In the proposed regulations, the Department of Labor for the first time specifies a
deadline by which the COBRA initial, or general, notice must be provided to covered
employees and covered spouses. The regulations establish a 90-day period for issuing
the general notice beginning with the date on which the employee or spouse first
becomes covered under the plan. This requirement can be satisfied by including the
general notice in the group health plan's summary plan description.
The initial COBRA notice must include, among other things, (i) the plans name
and contact information of the person responsible for administering COBRA benefits; (ii)
a general description of the plan's COBRA provisions, including information about
qualifying events, when COBRA benefits can be extended and the plan's requirements
for the payment of COBRA premiums; and (iii) an explanation of when a qualified
beneficiary is responsible for notifying the plan administrator about a qualifying event
and the plan's procedures for providing such notice.
Employer's Notice Requirement
The employer is responsible for notifying the group health plan administrator
about a qualifying event triggering an individual's right to elect COBRA continuation
coverage. This notice must be provided within 30 days of the qualifying event, although
plans may provide for the 30-day period to begin running when the qualified beneficiary
actually loses coverage. Qualifying events include the employee's termination or
reduction in hours; the employee's death; the employee's enrollment in Medicare; and
the employer's bankruptcy. The notice must include sufficient information to enable the
plan administrator to determine the plan, the covered employee, the qualifying event
and the date of the qualifying event.
Notice Requirements for Covered Employees and Beneficiaries
Covered employees or qualified beneficiaries are responsible for giving notice,
within 60 days after the occurrence of certain qualifying events, to the plan
administrator. These events include the divorce or legal separation of the employee
from a spouse or a dependent's loss of eligibility for coverage under the plan due to age
or higher education status. The covered employee or qualified beneficiary must provide
notice within 60 days of experiencing a second qualifying event after COBRA coverage
begins and must also provide notice regarding any disability determination that might
extend the period of COBRA coverage. The 60-day time period is a minimum standard,
and plans are free to adopt a longer period for employees and beneficiaries to give such
notices.
Reasonable procedures are to be established for the furnishing of notices by
covered employees and qualified beneficiaries. The proposed regulations set forth
general standards for determining the "reasonableness" of such procedures. These
include a description of the notification procedures in the summary plan description; the
person to receive such notices; the means to be used for giving the notice and the
information the notice must contain; and a description of the qualifying events
necessary for the plan to provide continuation coverage rights.
Notice Requirements for Plan Administrators
A group health plan administrator has 14 days after receiving notice of a
qualifying event to provide a COBRA election notice to each qualified beneficiary.
Where the employer is responsible for notifying the plan administrator of a qualifying
event and the employer is the plan administrator, the employer has 44 days to provide
the election notice. The election notice must describe the continuation coverage being
made available, how long it will last and any events that may cause it to be discontinued
earlier; explain how COBRA rights must be exercised and that each qualified
beneficiary has an independent right to elect continuation coverage; set forth the plan's
payment requirements, including grace periods and consequences of nonpayment;
describe any conversion options and how choosing them may affect continuation
coverage rights; and explain the consequences of electing or not electing continuation
coverage, including any effects on the individual's HIPAA portability and special
enrollment rights.
Additional provisions under the proposed regulations would require that notice be
provided explaining why continuation coverage is not available where a plan
administrator receives a notice of a qualifying event from a person not eligible to receive
continuation coverage under the plan. The regulations also require a notice regarding
early termination of COBRA coverage, which might occur, for example, when an
employer ceases to provide group health coverage to its employees or when the
COBRA premium is not timely paid. The notice must indicate the reason for the
termination of coverage; the date of coverage termination; and any rights the qualified
beneficiary may have to elect an alternative group or individual coverage.
Written by Craig J. Casey
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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