EBSA Press Release: Labor Department Requests Information On Notice Provisions Of Cobra Coverage [09/23/1997]

For more information call: (202) 219-8921
 

Today the U.S. Department of Labor issued a request for information (RFI) seeking public comment on whether a regulation is needed to clarify the disclosure requirements of the federal law under which employees and their beneficiaries can continue their group health coverage.

The federal right to have continued access to employer-provided group health coverage is commonly called "COBRA continuation coverage" after the legislation of which it was a part, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA applies to any group health plan maintained by an employer with 20 or more employees.

The COBRA continuation coverage provisions generally require group health plans to provide participants and beneficiaries who would otherwise lose group health coverage after certain events with the opportunity to elect to continue that coverage for a limited period of time. That period is usually not more than 18 months after termination of employment or 36 months if the coverage would be lost due to the participant's death or divorce. The person entitled to elect continuation coverage, called the "qualified beneficiary," may be required to pay the group premium rate for the coverage, plus 2 percent.

As part of making continuation coverage available, employers and plan administrators must give participants and qualified beneficiaries certain disclosure notices, which explain the rights given by the federal law and the manner in which these rights must be exercised. The qualified beneficiary's ability to make use of COBRA continuation coverage may depend on the adequacy of the disclosure notices.

Since COBRA's enactment, the department has received numerous inquiries from the public regarding the timing and content of the disclosure notices. COBRA has also been amended several times, and the department is considering updating a model notice that it issued in 1986 to take into account these amendments. Also, the passage more recently of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other health-related legislation have affected the significance of the COBRA disclosure requirements.

"The information furnished in response to this request will assist the department in evaluating the need for regulatory guidance in this important area," noted Assistant Secretary Olena Berg, head of the department's Pension and Welfare Benefits Administration.

Written comments should be provided to the department on or before November 24. They should be addressed to the Office of Regulations and Interpretations, Pension and Welfare Benefits Administration, Room N-5669, U.S. Department of Labor, 200 Constitution Ave. NW, Washington, DC 20210, Attn: COBRA RFI.

Copies of the request for information are available from the Public Disclosure Room, N-5638 at the above address, telephone (202) 219-8771, or via PWBA's Internet address at http://www.dol.gov/ebsa/ under "What's New in PWBA."

This information will be made available to sensory impaired individuals upon request. Voice phone call (202) 219-8921, TDD phone 1-800-326-2577.