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On May 1st, 2020 the Department of Labor issued a news release pertaining to the revised COBRA model notices that were recently updated on the DOL website.
In addition to the revised model notices, the DOL also issued an accompanying FAQ relating to the revised notices, which can be found HERE. The models are for the (i) general or initial notice (provided to employees and covered spouses within the first 90 days of coverage under the group health plan), and (ii) the election notice (provided to qualified beneficiaries within 44 days of the qualifying event resulting in a loss of coverage). This is the first time the COBRA Notices have been updated since 2014. It should be noted, however, that these revised notices do not have anything to do with the ongoing COVID-19 pandemic or the joint final rule that was issued extending certain healthcare deadlines in response to the coronavirus outbreak. For that reason, some could argue that releasing revised COBRA model notices now, with everything that is going on, was untimely and could cause some confusion, but nonetheless, the real reason the model notices were revised were to update certain verbiage in the hopes that it will help plan participants make more informed decisions pertaining to healthcare benefit options, especially those of Medicare-eligible age.
What does this mean for COBRA administration moving forward?
Contrary to popular belief, the release of these new model notices does not mean that the pre-existing COBRA notices would now be deemed insufficient or noncompliant, because that is certainly not the case. None of the actual COBRA law itself was altered or amended, so the requirements of what needs to be on the COBRA Notice did not change. As previously mentioned, the DOL simply updated certain texts in the model notices with the intent to ensure that qualified beneficiaries better understand the interactions between Medicare and COBRA. The goal is that the new verbiage on the model notices is more user-friendly and understandable to someone with little to no knowledge about their rights under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
Another common misconception is the assumption that employers and third-party COBRA administrators are required to use the DOL issued model notices, which is just not the case. While there are certainly regulatory and legal ramifications if certain information is excluded from either the general notice and/or the election notice, there is no penalty for using alternative notices from that of the DOL’s model notices. Albeit it is typically considered best practice and more convenient to use the DOL model notices - as long as all the required information is on the notices being used, organizations are free to draft or customize their own.
According to the DOL’s Employer’s Guide to COBRA, the requirements for both notices are as follows:
• The name of the plan and the name, address, and telephone number of someone the employee
and spouse can contact for more information on COBRA and the plan;
• A general description of the continuation coverage provided under the plan;
• An explanation of what qualified beneficiaries must do to notify the plan of qualifying events
• An explanation of the importance of keeping the plan administrator informed of addresses of
the participants and beneficiaries; and
• A statement that the general notice does not fully describe COBRA or the plan and that
more complete information is available from the plan administrator and in the summary plan
• The name of the plan and the name, address, and telephone number of the plan’s COBRA
• Identification of the qualifying event;
• Identification of the qualified beneficiaries (by name or by status);
• An explanation of the qualified beneficiaries’ right to elect continuation coverage;
• The date coverage will terminate (or has terminated) if continuation coverage is not elected;
• How to elect continuation coverage;
• What will happen if continuation coverage isn’t elected or is waived;
• What continuation coverage is available, for how long, and (if it is for less than 36 months),
how it can be extended for disability or second qualifying events;
• How continuation coverage might terminate early;
• Premium payment requirements, including due dates and grace periods;
• A statement of the importance of keeping the plan administrator informed of the addresses of
qualified beneficiaries; and
• A statement that the election notice does not fully describe COBRA or the plan and that more
information is available from the plan administrator and in the summary plan description.
CobraHelp would like to assure our current and potential clients that all of our notices were thoroughly drafted, reviewed, and approved by a team of expert ERISA attorneys who specialize in labor laws and that all of the notices we send out are sufficient and compliant, both prior to and after the release of the revised DOL model notices. That being said, CobraHelp will still review and update our notices accordingly in order to help employers and brokers offer the latest inclusions on file for plan participants/qualified beneficiaries so that they get the most detailed, easily understood, and comprehensive versions of the notices available. Afterall, your business is unique, so your COBRA and HR compliance administrator should be too.