- Posted by Jessica Waltman
- On April 24, 2020
A big part of effective employee benefits plan compliance is stopping problems before they happen. COBRA administration is an excellent example of an area being proactive can yield significant benefits.
Recently, there has been a spate of high-profile legal action against big-name employers relative to COBRA administrative deficiencies. In particular, employers have been subject to class-action litigation for lax COBRA notice procedures. Some of the issues in these cases include: (1) COBRA notices that did not include the name and contact information of the plan administrator or COBRA claims administrator; (2) notices that did not include critical COBRA enrollment details and COBRA payment information; (3) notices that did not include the enrollment form; and (4) improperly addressed notices. The penalty for group plan administrators that fail to provide the required initial COBRA notice or the COBRA election notice properly can be $110 per day per person. The courts also have the discretion to require the employer to pay the affected COBRA beneficiaries’ legal fees. So, reviewing COBRA notices and election packets for readability and completeness could be a valuable exercise.
Your Kistler Tiffany Benefits’ Client Executive can always assist you if you have COBRA administrative questions, but there are also many free COBRA compliance resources available to group health plan administrators. The Department of Labor provides COBRA notice templates that will satisfy all legal requirements, as long as you make sure they are filled out completely and delivered appropriately. Another excellent resource from the Department of Labor is An Employer’s Guide to Group Health Continuation Coverage Under COBRA. It not only gives you a detailed summary of COBRA continuation coverage but it also succinctly explains all the rules you need to know when managing your group health plan.