Most employers probably do not think too much about their COBRA notices. These are just standard forms that never change, right? Well, that’s not actually true. As I have discussed, the Affordable Care Act (aka Obamacare) made some pretty major changes to COBRA notices. And if your standard COBRA notice does not contain all of the required information, then each former employee could become a potential litigant. Courts can assess up to $110 per day in fines for deficient COBRA notices and require employers to pay the other side’s attorneys’ fees.
COBRA requires employers with 20 or more employees to continue to provide health insurance benefits for recently-departed employees and their spouses and children. While the employer does not have to pay for the former employer’s benefits, it does need to permit the former employee to remain on the employer’s group plan for at least 18 months.
The law also requires employers to send out notices to former employees within 45 days of the employee leaving the employer. Failure to send out these notices or sending out the notices without all of the required information, could subject the employer to penalties or a lawsuit.
The Department of Labor has a model COBRA notice, which you can access by clicking here. I would recommend tailoring your COBRA notice as closely to the DOL’s notice as possible. If you have any questions about what needs to be included in this notice or how to comply with COBRA, let us know and we will be happy to answer your questions.