Best Practices for Initial COBRA Notices | California Benefit Advisors

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires group health plans to provide notices to covered employees and their families explaining their COBRA rights when certain events occur. The initial notice, also referred to as the general notice, communicates general COBRA rights and obligations to each covered employee (and his or her spouse) who becomes covered under the group health plan. This notice is issued by the plan administrator within the first 90 days when coverage begins under the group health plan and informs the covered employee (and his or her spouse) of the responsibility to notify the employer within 60 days if certain qualifying events occur in the future.

• The plan administrator’s contact information
• A general description of the continuation coverage under the plan
• An explanation of the covered employee’s notice obligations, including notice of
  • The qualifying events of divorce, legal separation, or a dependent’s ceasing to be a dependent
  • The occurrence of a second qualifying event
  • A qualified beneficiary’s disability (or cessation of disability) for purposes of the disability extension)
• How to notify the plan administrator about a qualifying event
• A statement that that the notice does not fully describe continuation coverage or other rights under the plan, and that more complete information regarding such rights is available from the plan administrator and in the plan’s summary plan description (SPD)

• Direct qualified beneficiaries to the plan’s most recent SPD for current information regarding the plan administrator’s contact information.
• For plans that include health flexible spending arrangements (FSAs), disclose the limited nature of the health FSA’s COBRA obligations (because certain health FSAs are only obligated to offer COBRA through the end of the year to qualified beneficiaries who have underspent accounts).
• Explain that the spouse may notify the plan administrator within 60 days after the entry of divorce or legal separation (even if an employee reduced or eliminated the spouse’s coverage in anticipation of the divorce or legal separation) to elect up to 36 months of COBRA coverage from the date of the divorce or legal separation.
• Define qualified beneficiary to include a child born to or placed for adoption with the covered employee during a period of COBRA continuation coverage.
• Describe that a covered child enrolled in the plan pursuant to a qualified medical child support order during the employee’s employment is entitled to the same COBRA rights as if the child were the employee’s dependent child.
• Clarify the consequences of failing to submit a timely qualifying event notice, timely second qualifying event notice, or timely disability determination notice.