Benefitslink.com has posted a Press Release today entitled “Labor Department Announces Proposed Effective Date of COBRA Regulations Will Be Delayed” which states:
In response to questions about complying with the department’s proposed COBRA notice rules, Assistant Secretary of EBSA Ann L. Combs said, “The department intends to give group health plans six months after adoption of final rules to implement administrative changes required by the new rules. Allowing sufficient time for orderly and efficient implementation of the new requirements will help ensure compliance,” added Combs. The final rules are expected to be issued early next year, according to Combs. “In the interim, plan administrators may use the model notices contained in the proposed regulation to satisfy their COBRA notice obligations, although they are not required to do so,” said Combs.
The proposed COBRA regulations which were issued May 28, 2003, were supposed to take effect January 1, 2004, and the DOL had also announced in the regulations that any old COBRA notices which were modeled after the one issued in ERISA Technical Release 86-2 (June 26, 1986) would no longer satisfy good-faith compliance requirements beginning May 28, 2003. Presumably using the model notice provided by the DOL in the proposed regulations was to constitute good-faith compliance. However, this statement by Combs indicates that EBSA has decided that there should be a later effective date and has backed off from requiring employers to immediately begin using the new model notice as provided in the proposed regulations. As many of you may recall, many of the comments received by the DOL regarding the proposed COBRA regulations requested a more reasonable effective date (as discussed in this post).
A couple of the significant changes to be brought about by the proposed regulations would be the additional notice requirements for plan administrators:
- The proposed regulations would require a notice be given to employees and qualified beneficiaries, who notify the plan administrator of a “qualifying event” but who are not otherwise entitled to COBRA coverage, of the reason such coverage is unavailable. The plan administrator would have to provide this information within 14 days of receiving notice of the “qualifying event.”
- The proposed regulations would also require that a qualified beneficiary be sent notice of termination of COBRA coverage when that termination occurs before the end of the maximum period of COBRA coverage.