The Department of Labor Publishes New COBRA Model Notices

The Consolidated Omnibus Budget Reconciliation Act of 1985 – “COBRA” as commonly known – gives certain former employees, their spouses, and dependent children the right to temporary continuation of health coverage at the employer’s group rates. COBRA generally obligates employers with 20 or more employees to offer COBRA coverage when coverage is lost due to certain specific events, and to notify their employees of the availability of such coverage.

COBRA obligates employers to provide their employees with various notices during and after employment including, among others, a “General Notice” which describes general COBRA rights and employee obligations, and an “Election Notice” which describes the rights to continuation coverage and explains how the qualified beneficiary(ies) makes an election. The Department of Labor (the “DOL”) produces and publishes model notices which employers can use to ensure compliance with COBRA’s notification requirements.

The DOL recently published updated models of its General Notice and Election Notice. The updated model notices contain information regarding the Health Insurance Marketplace established by the Affordable Care Act, including information regarding the beneficiary’s right to obtain coverage through the Marketplace as an alternative to COBRA, and information regarding coverage and premium cost differences between the Marketplace and COBRA continuation coverage.

Although the updated models are based on regulations which have merely been proposed (as opposed to adopted as final), the DOL considers use of the new models to be good faith compliance with COBRA’s notice content requirements. Employers are not required to use the DOL model notice forms, but doing so will help facilitate compliance with COBRA’s notice requirements. The updated model notices can be found on the DOL’s website. Because the model notices are general templates, employers should consider whether further revisions are necessitated due to state law or unique employer practices.

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