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Cobra Update

Corporate Lawyers

Posted in on March 13, 2014

The Department of Labor and the Employee Benefits Security Administration have begun enforcing new regulations relating to employee health care continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). The new federal regulations impose two new notice requirements and modify four existing notice requirements for plan administrators, employers, and qualified beneficiaries under COBRA. These regulations apply to notice obligations that arise in plan years commencing after November 26, 2004 (i.e. January 1, 2005 for calendar year plans). The new regulations affect the following notices:

  • (New) Notice of Unavailability of Continuation Coverage
  • (New) Notice of Early Termination of Continuation Coverage
  • (Now Mandatory) General Notice to Covered Employees at Plan Commencement
  • Employer’s Notice to Plan Administrator of Qualifying Event
  • Qualified Beneficiaries’ Notice to Plan Administrator of Qualifying Event
  • Plan Administrator’s Notice of Rights to Qualified Beneficiaries

Cobra applies to employer health care plans with twenty or more employees, while its Massachusetts counterpart “mini-COBRA” is applicable to employer plans with two to nineteen employees. Plans that comply with the federal regulations also satisfy state mini-COBRA regulations. Failure to adhere to these new notice requirements may result in severe employer liability.