EBSA Posts Final COBRA Notice

July 15, 2004 (PLANSPONSOR.com) - The Employee Benefits Security Administration (EBSA) has posted its final model initial Consolidated Omnibus Budget Reconciliation Act (COBRA) notice.

The final model notice follows the EBSA’s May release of notice regulations that set minimum standards for the timing and content of the notices required under COBRA, and establish standards for administering the notice process.   The final notice can be found on the  Department of Labor’s Web site .

The final regulations clarify the requirements applicable to the general notice, the employer’s notice of a qualifying event, the qualified beneficiary’s notice, and the plan administrator’s election notice.   New to the final model notice is a correction issued by the EBSA on June 23 (See  DoL Corrects COBRA Guidance ).  The changes include:

  • Paragraph (d) of Section 2590.606-2, which permits delivery of a single notice addressed to a covered employee and the covered employee’s spouse at their joint residence, provided that the plan’s latest information indicates that both reside at that address.Paragraph (d) states, on page 30097, that “nothing in this section shall be construed to create a requirement to provide a separate notice to dependent children who share a residence with a covered employer or a covered employee’s spouse to whom notice is provided in accordance with this section.” The term “covered employer” in this sentence should instead be “covered employee.”
  • In an appendix to Section 2590.606-4, the DoL also published a Model COBRA Continuation Coverage Election Notice for use by single-employer group health plans. The section of the model notice entitled “Important Information About Your COBRA Continuation Coverage Rights” indicates, on page 30108, that continuation coverage will be terminated before the end of the maximum period if, among other things, “a covered employee becomes entitled to Medicare benefits (under part A, Part B, or both) after electing continuation coverage.” The term “covered employee” on this page should be changed to “qualified beneficiary.’

Plan sponsors do not have a lot of time to prepare; the final regulations will apply to notice obligations arising in plan years beginning on or after November 26, 2004 (calendar-year plans must comply starting January 1, 2005) (See  Rules/Regs: Final Notice ).

«