Last May, the Department of Labor issued new regulations regarding notice requirements for healthcare continuation under COBRA. The new rules are designed to give guidance to the employer/plan administrator and for the employees to better understand their COBRA rights. I think you understand that you do have a responsibility to provide your ex-beneficiary (covered employee/dependents) a notice of the “Right to Elect Continuation of Coverage”, when there is a qualifying event. Some of you also may be sending out “initial” COBRA notices to new employees on your plan, explaining now that you (employee/dependents) have benefits, you will be entitled to the “Right to Elect Continuation of Coverage” if certain qualifying events should occur. This is the piece that must be instituted for all groups renewing on or after December 1, 2004. Basically, COBRA notification must be given at the beginning as well as the end. This will also put responsibility on the qualified beneficiary to notify you (plan administrator) of an event, in a timely manner. Additional regulations from DOL require the plan administrator establish “reasonable procedures” to be followed by qualified beneficiaries in notifying the employer of a qualifying event. You are at liberty to establish your own time frame for notification, and it must be in writing. This should be outlined in your “summary plan document”, if you have one, or included with the initial COBRA notification. Another new requirement is if the plan administrator receives notice of a qualifying event but determines that the qualified beneficiary is not entitled to continuation of coverage (e.g., employee terminated for gross misconduct), the plan administrator must send out a notice (in writing) explaining this determination, within 14 days of receiving notice of the event. Finally, under the new rules, the plan administr tor will now be required to notify qualified beneficiaries when their COBRA coverage will terminate. This could be due to nonpayment of premium, end of the 18 months, or becoming eligible under another plan.
I’m sure some of you have already incorporated these procedures, but now it is official. It’s logical to keep everyone informed, and once a routine is established, it will result in a more efficient program. I would suggest for those of you who have had a plan in place for some time, and never sent out an initial COBRA notice (many are in this boat), it may be a good payroll stuffer for the new year. We have a form that you could use on your company stationery, for this purpose. This can be found and downloaded from our web site at www.bates-inc.com, under "what's new” on our homepage. We also have sample forms you could use, again on your company stationery, when a COBRA event occurs and you need to send out notification.
Please call me if you have any questions or concerns, and above all, don’t panic! As long as you’re making an effort to comply, you’re doing your job. It’s hard to keep up with all the federal and state regulations and to sift through the ones of importance, but these 4 new rules do warrant your attention. We are available to help you implement these into your benefits program if you need our assistance.
Have a wonderful holiday season and best wishes for a great new year!