Contained in the May 28, 2003 Federal Register , the proposals, scheduled to become effective in final form for plan years beginning in 2004, provide guidance and model notices for workers and family members to continue their group health care coverage. Under COBRA, most group health plans must give employees the opportunity to elect a temporary continuation of their group health coverage when coverage would otherwise be lost.
Overall, five separate areas are covered in the proposed regulations:
- general or initial notice
- qualifying event notices provided to plan administrators from employers
- notices qualified beneficiaries must provide to plan administrators
- election notice
- two new notices not previously mentioned in the COBRA statute: notice of COBRA coverage termination and notice of unavailability of COBRA coverage.
The general notice covers the basic information on COBRA that employees and their families need to know to protect their rights before a qualifying event occurs.The notice must be furnished to qualified individuals within 90 days after coverage begins, a requirement that can be satisfiedby including the required information in the summary plan description (SPD) and furnishing the document within the 90-day time limit. A revised model general notice is designed to make it easier for plan administrators to comply with the notice requirements.
Notice For Employers
The proposal contains regulations that an employer must follow in providing plan administrators information about the occurrence of certain qualifying events . It discusses the statutory deadline for such notices – generally 30 days after the date of the qualifying event – and contains a brief description of the required content.
Covered Employees And Beneficiaries
Employees or a family member, are required to notify the plan administrators of a qualifying event, such as a divorce or legal separation and loss of dependent status under the plan. For the sponsor’s part, t he proposal would require plans to have reasonable procedures for requiring employees and their families to give this notice and for setting time limits as to when it must be given. Plans would be required to accept notices that meet the minimum content requirements of the proposal.
The proposal requires certain documentation to be given before individuals can elect continuing coverage. Among these is the requirement that e mployers must notify plan administrators of certain types of qualifying events, such as loss of job, reduced working hours, death of the employee, and enrollment of an employee in Medicare. Additionally, t he election notice would have to describe available health plan options, premium payment requirements, the consequences of failing to elect COBRA, and how COBRA coverage could be extended due to disability or a second qualifying event. A model election notice is included in the proposal.
New Notice Requirements
Plans must provide a new “notice of unavailability of continuationcoverage” if they receive a notice from a covered employee or qualifiedbeneficiary of a qualifying event. The regulations specify the required contents ofthis notice and state that it must be provided within the sametimeframe as an election notice.
The other addition is the requirement that plans must provide a written notice to qualified beneficiariesreceiving COBRA coverage of any early termination of COBRA coverage. This notice must be provided “as soon as practicablefollowing the administrator’s determination that continuation coverageshall terminate” and must contain information described in theregulations.
All of the information is covered in the Federal Register release found here .