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Employer Law FAQ

What Notices Must an Employer Provide for COBRA?

COBRA (Consolidated Omnibus Budget Reconciliation Act) amended the Employee Retirement Income Security Act (ERISA) to provide for continuation of group health care coverage for covered beneficiaries upon the occurrence of certain qualifying events.

  • Covered beneficiaries include employees, former employees and retirees who are or were enrolled in the employer group health plan, their spouses, former spouses and any dependent children.
  • Qualifying events include the termination of the covered employee; a reduction in the covered employee's work hours; the covered employee becomes eligible for Medicare; the covered employee's death; divorce or legal separation. A dependent child also may elect COBRA coverage at the time the child loses dependent status.

COBRA requires covered employers to provide certain notices to covered employees and their beneficiaries as well as the plan administrators of the group health care plan. State and local governments, employee organizations and private employers with 20 or more employees are covered employers for COBRA purposes. Employers who fail to provide these notices as mandated by federal law may be held liable for their violations.

General COBRA Notice

Employers must provide a general notice of COBRA rights to all employees enrolled in the plan and their spouses within the first 90 days of coverage. The general notice should contain information about the employee's COBRA rights, the contact information for the group health care plan, a description of continuation coverage and the qualifying event for which the employee must provide notice to the plan administrator. The general notice can be included with the summary plan description.

Summary Plan Description

Employers must include employees' COBRA rights in the group health plan's summary plan description (SPD). The SPD gives employees who have elected coverage under the employer's group health plan general information about the plan, its benefits, its coverage and other vital information. Employers are required to provide covered employees with the SPD within 90 days after the employee elects coverage under the plan.

Material Changes in the Health Care Plan

If there are any material changes to the health care plan, the employer must provide a summary of those changes to employees no later than 210 days after the end of the plan year for which the changes become effective. This is known as a summary of material changes (SMM).

If the material change is a reduction in benefits or coverage, the employer must provide employees with the SMM within 60 days after the change has been adopted.

Qualifying Events

In order for employees to elect continuation coverage under an employer's group health care plan, a qualifying event has to occur. Depending on the type of qualifying event, either the employee or the employer must notify the plan's administrator of the event in order to trigger COBRA coverage. The employer is responsible for notifying the plan administrator within 30 days of the occurrence of the following qualifying events:

  • Termination of the employee, either involuntary or voluntary
  • Reduction in employee work hours
  • Death of employee
  • Employee becomes entitled to Medicare
  • Employer is bankrupt

The employee has a duty to notify the plan administrator in cases of divorce or legal separation or instances where a child will lose dependent status. Employers should include the procedure employees are required to use to provide notice to the plan administrator in the SPD or general notice.

For more information on employer duties under ERISA in general or COBRA in particular, consult an employment law attorney knowledgeable in employee benefits.

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DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent counsel for advice on any legal matter.

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Betty L. Brown
Board Certified by the Texas Board of Legal Specialization
in Labor and Employment Law
Fountain Park
1021 Long Prairie Road, Suite 402
Flower Mound, TX 75022
Phone: 972-355-0092
Fax: 972-899-9635
E-mail: betty@brownemploymentlaw.com