Earlier this month, the United States Department of Labor (DOL) issued two updated COBRA notices—a revised model general COBRA notice and a new model COBRA election notice—and proposed regulations that would allow the DOL to publish updated model notices on its website. Thus, employers should consider using these revised notices and monitor further notice updates. In addition, the issuance of these new notices may serve as an impetus for employers to review and update other documents that contain COBRA notices or a discussion of COBRA rights.
Notices Reflect ACA Health Insurance Marketplace
These notices were revised to inform recipients that they may choose to purchase medical coverage through the newly created Health Insurance Marketplace, put in place through the Patient Protection and Affordable Care Act (ACA), instead of electing to continue medical coverage through COBRA. Employers are not required to use the model COBRA notices and may craft their own notices, which otherwise meet the notice content requirements. Nonetheless, use of the model notices by an employer constitutes good faith compliance with these notice requirements. A link to the DOL webpage, which contains the new notices, is included here: Employee Benefits Security Administration Main Page.
Employer Action Steps to Consider
Employers who use the model general COBRA notice and/or the model COBRA election notice should begin using the updated notices. If an employer uses a third-party administrator to administer COBRA, the employer may want to verify that the administrator is now using the new COBRA notices.
In addition to implementing the new notices, employers should consider:
Reviewing current COBRA administration procedures to ensure that these COBRA notices not only meet content requirements, but also are being provided timely.
Reviewing and updating the general COBRA notice provided in a group health plan summary plan description (SPD) if an employer provides this notice as a part of the SPD.
Distribution Requirements Remain Unchanged
It is important to note that the DOL changed only the content of these COBRA notices and not the distribution requirements. Thus, an employer with a group health plan subject to COBRA is still required to provide a general COBRA notice to enrollees in its group health plan within 90 days of an individual's enrollment date in the group health plan. In addition, the employer is required to provide an individual (a "qualified beneficiary") covered by a group health plan with a COBRA election notice within 44 days of when he or she loses group health plan coverage as the result of certain COBRA qualifying events. COBRA qualifying events that result in an employer's having to initiate the provision of a COBRA election notice include the death of the covered employee, termination of employment (for reasons other than gross misconduct), a reduction in the covered employee's hours, the covered employee's entitlement to Medicare or the employer's bankruptcy.