Are You Using the Correct COBRA Notices?

When the Affordable Care Act (ACA) was implemented, it had a ripple effect on many other employment laws, one being the Consolidated Omnibus Budget Reconciliation Act (COBRA). In keeping with the new law, the Department of Labor (DOL) announced changes to the COBRA notification requirements in May of 2013. Earlier this month, the DOL proposed new regulations that may result in still more revisions.

Though these revisions are not yet final, the DOL just rolled out new COBRA model notices: the “general notice” (given to employees upon eligibility for company-provided health benefits) and the “election notice” (given when the employee experiences a qualifying event).

These new notices have been updated with information about the coverage options available through the Marketplace exchanges and special enrollment options, as well as a link to the exchange website. Until these proposed regulations are finalized, the DOL said it will consider use of these new notices as a good faith effort by covered employers to comply with the law, regardless of changes that may be coming.

Though COBRA generally considers employers with 20 or more employees to be a “covered employer”, smaller companies may be obligated to use these notifications too. Many states, including Pennsylvania, have Mini-COBRA laws that obligate employers with fewer than 20 employees to comply with many COBRA provisions. If you offer medical insurance to your employees, no matter how many you have, it is best to update the notifications you use.

If you have hired a third party administrator (TPA) to handle your COBRA administration, don’t assume that frees you from dealing with compliance obligations. If your plan administrator fails to extend the proper notification to your employees, you may be penalized. As with any TPA service, employers that use TPA services for COBRA administration are still responsible for ongoing oversight of their COBRA notification system.

The new notices are available for free download on the DOL website’s COBRA page under the “For Employers” heading.

If you have questions about COBRA, or any other HR issue, please email us at HRhelpline@eastcoastrm.com. We will be happy to help.

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