Updated COBRA Model Notices

May 7, 2020

A  Department of Labor (DOL) Press Release announced the issuance of Frequently Asked Questions under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and revised COBRA model notices. Plan administrators can use these model notices to notify plan participants and beneficiaries of their rights under COBRA and qualified beneficiaries of their rights to elect COBRA.

In general, COBRA allows employees (and their families) who would otherwise lose their group health coverage due to certain life events to continue their same group health coverage. These events include termination or reduction in hours, death of a covered employee, divorce or legal separation, Medicare entitlement and loss of dependent status. COBRA generally lasts for 18 months but, in some cases, can last up to 36 months. Under COBRA, group health plans must also provide covered employees and their families with certain notices explaining their COBRA rights. The revised model notices provide additional information to address COBRA’s interaction with Medicare. The model notices explain that there may be advantages to enrolling in Medicare before, or instead of, electing COBRA. It also highlights that if an individual is eligible for both COBRA and Medicare, electing COBRA coverage may impact enrollment into Medicare as well as certain out-of-pocket costs.

These documents provide important information to COBRA-eligible individuals as they make healthcare choices for themselves and their families while assisting employers that must comply with the notice requirements under COBRA. Note that these model notices do not include updated COBRA election timelines to address the recently announced extended notice, election and COBRA premium payment periods in light of the COVID-19 national emergency.

Next steps
The Model General Notice and Model Election Notice are available on the DOL website in modifiable, electronic form. As with the prior versions of the model notices, to use the model notices properly the plan administrator must complete them by filling in the blanks with the appropriate plan information. Employers will need to update their notices and should work with their COBRA vendors to review the notice content and to confirm that their notices are written in simple, straightforward language. Given a recent increase in COBRA notice litigation, employers should seriously consider using the DOL’s model notices to gain the protection of “good faith compliance.” Employers should also be aware that even when using the model notices, it may be appropriate to supplement the notices with additional, plan-specific information.

Conner Strong & Buckelew will provide alerts and updates as new information becomes available. Please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.