How to Avoid The Most Common General Notice Oversights
However, this simple yet informational notice is often mishandled, or completely forgotten which can lead to costly lawsuits, hefty fines, and overall stress for an HR team. In this article we look at a few simple ways CobraHelp can ensure that an adequate Initial Rights Notice is provided to employees and common pitfalls to avoid.
What’s in a Notice?
In a nutshell, the General Notice is a mandatory COBRA notice that must be provided to all employees within 90 days of enrollment into group health benefits. This notice details the employee’s continuation coverage rights under COBRA, should the employee ever experience a qualifying event.
The General Notice must be sent to the employee as well as any covered dependents. It advises the employee and covered dependents of certain rights they may have if certain scenarios were to arise. For example, if the employee were to pass away, then covered surviving dependents would have a right to continue group health benefits under COBRA for up to 36 months. There are many examples such as this provided throughout an adequate General Notice. The U.S. DOL EBSA division provides a model notice as well that employers may use as a baseline for notifying eligible employees of their rights under COBRA compliance. However, it is always recommended that any employer provided notice be reviewed by expert legal counsel.
Avoid Tricky Notification Pitfalls.
Employers often tell us that they simply hand the notice to employees as part of the orientation packet, or as part of a benefits information kit when a new employee goes on benefits.
While this approach is not expressly prohibited by the COBRA statute or Internal Revenue Code, it is recommended that employers take a more detailed and well documented approach for providing the General Notices for for several reasons:
- Handing an employee a General notice only informs the employee; it doesn’t meet the government’s requirement to notify all covered dependents upon enrollment.
- Similarly, if the employer is only providing General Notices when a new hire enrolls into benefits such as health, dental and vision, then this is not going to cover the COBRA compliance mandate to notify all covered spouses when a dependent spouse enrolls later on. For example, let’s say a spouse enrolls into the group health benefits as a dependent of the employee a few months down the line due to job loss. If the employer is only handing out General notices to new hires, this spouse’s mandated notification will be overlooked, and this can cause serious liability issues or penalties for the employer in the future should a qualifying event occur.
- Simply “handing out” an important document doesn’t provide any proof it was provided or was provided timely. For example, if an employee experiences a divorce down the road, and fails to notify the employer of the event, the employer will not be on the hook for COBRA benefits for the former spouse in this instance if the employee was adequately notified of the General Notice. On the other hand, if the employer has no evidence that the notice was provided, the employee may say that he or she was never made aware of their obligations to notify the plan of the qualifying event. If employees aren’t aware of their obligations and rights, this can cause them to forfeit coverage in cases of divorce, Medicare entitlement or other circumstances. Therefore, it is highly recommended that plans provide notices via 1st class certificate of mail or certified mail so that there’s a paper trail, protecting the employer and the employee in the future.
Strategy for Success…
Employers should work on strategies that allow both employees and covered spouses to receive timely Initial Rights Notices in-house or via outsourcing to an Expert COBRA provider to ensure COBRA compliance.
- Use tracking applications like Monday or Salesforce to help their Human Resources teams tackle the General Notice Duties on time and keep everyone on track.
- Hire a mail service to help with the postage and “proof of mail” aspect rather than simply handing an employee an important Initial Rights Notice or emailing it where it could be lost in “cyberspace”. There are many parcel and mail services that can provide certified or certificates of mail.
- Outsource COBRA to an Expert vendor such as CobraHelp. Many COBRA administrators provide the Initial Rights Notice as part of a COBRA services package and can integrate this with your existing benefits enrollment system. A Third Party Administrator can not only track these notices, but can also ensure they are timely and have proof of mailing such as certificate of mail. TPAs can often do this at a fraction of the cost of what your HR department will spend to do it in-house.
Legal Disclaimer:
The information in this website is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from CobraHelp. or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.