Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), group health plans are required to provide covered employees and their families with detailed notices describing their COBRA rights.
Notice Procedures
Summary Plan Description
A discussion of COBRA rights should be included in the health plan’s Summary Plan Description (SPD). The Employee Retirement Income Security Act (ERISA), requires group health plans to furnish each participant with an SPD within 90 days of plan participation. Additionally, any material changes to the plan require the distribution of a Summary of Material Modifications (SMM) within 210 days after the end of the plan year in which the changes take effect. In case of significant reductions in covered services or benefits, the plan administrator must provide the SMM within 60 days of the reduction.
COBRA General Notice
Within the first 90 days of coverage, group health plans must issue a general notice detailing COBRA rights to employees and their spouses. This notice must include information such as plan details, a description of continuation coverage, instructions for notifying the plan of qualifying events, and the importance of maintaining current contact information. To streamline this process, the Department of Labor offers a model general notice that plans can use as a basis for drafting their own general notice.
COBRA Qualifying Event Notice
Upon the occurrence of a COBRA qualifying event, such as termination of employment or reduction in hours that causes a loss of health coverage, the employer must distribute a qualifying event notice.
COBRA Election Notice
Upon receipt of a qualifying event notice, the plan must furnish qualified beneficiaries with an election notice. This notice explains the rights to continuation coverage, termination dates, premium payment requirements, and how to elect to extend coverage under COBRA. The Department of Labor has a model election notice that should be used as a basis for the election notice.
COBRA Notice of Unavailability of Continuation Coverage
If a request for continuation coverage is denied, the plan must issue a notice of unavailability within 14 days, providing reasons for the denial.
COBRA Notice of Early Termination of Continuation Coverage
If COBRA continuation coverage is terminated before the maximum available time period, the plan must notify the qualified beneficiary, detailing the termination date, reasons for termination, and any alternative coverage options available.
Navigating COBRA notice procedures is important to ensure compliance of the group health plan.
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