The normal difficulties that employers have adhering to the technical requirements of COBRA have been exacerbated during the past two years as COBRA rules were changed to recognize the complications accompanying the COVID-19 pandemic. This added complexity is particularly worrisome as an employer’s simple oversight in administering COBRA can result in ERISA penalties, an excise tax, unintended self-insurance of medical claims, and litigation, including class-action lawsuits.
To better mitigate their exposure, employers should know these significant developments with COBRA during the past two years.
Updated Model COBRA Notices: On May 1, 2020, the Department of Labor (DOL) published a new model general COBRA notice and a new model election COBRA notice. The primary update to the DOL model notices is an added section for those considering Medicare in lieu of COBRA. Use of the model notices, if properly adapted for the specifics of an employer’s group health plan, is considered good faith compliance with the notice content requirements of COBRA. The model notices are available on the Department of Labor website. (For additional information, please see our Benefits Law Advisor article.)
Extended COBRA Deadlines: On April 29, 2020, the DOL and Internal Revenue Service (IRS) issued a Joint Notice extending many deadlines relating to COBRA, including the deadlines for an individual to elect COBRA coverage and pay COBRA premiums. Generally, the deadlines were extended by...
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