COBRA Initial Notification

[Guest kchristy]

Inclusion of COBRA continuation rights in the SPD is standard practice, so you're fine.

[Guest TommyH]

Can anyone tell me if having the initial notification of COBRA in the SPD satisfies the requirement of notification to a new hire. Or, should the initial notification be sent by mail to the employees home?

[Guest Penn]

I disagree, especially since courts (almost) always side with the beneficiaries. Not only should you mail the notices, when a spouse becomes covered you should also mail a notice to the spouse.

[Guest Lori Senter]

I agree with Penn. The A&E Roberts seminars I have attended have suggested vehemently that initial notification be sent to the employee's home addressed to the employee AND FAMILY. The logic is that if it's in the new-hire packet or SPD only, the spouse is unlikely to see that (especially if that's distributed at work). Also, even if you mail it home and it's addressed to the employee, the spouse wouldn't necessarily open the employee's mail.

[Guest HIPAAdrome]

But the COBRA information should ALSO be in the SPD. The proposed SPD content rules, if finalized, would require this. It's a good idea even without those rules.

[Guest LCUtell]

Penn, Sentor and HIPDROME are correct

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LCUtell

[Brigid Anderson]

Forgive my delay in responding here--we just sent the March edition of "COBRA--The Developing Law," Employee Benefit Institute of America's COBRA guidebook, to the printer. I have been meaning to respond, but haven't had time.

I also agree with those who disapprove of using the SPD alone, and the reason given is also correct--the distribution rules applicable to SPDs are less demanding than those applicable to the initial COBRA notice. Specifically the notice must go to the employee AND the spouse "immediately upon commencement of coverage." In contrast, an SPD need not be distributed to covered spouses and need not be distributed to a new hire until 90 days after he or she becomes a plan participant. So while there is nothing really wrong with using an SPD as an initial notice, such a practice will comply with COBRA only if the distribution methods are significantly altered to comply with COBRA. And note, even if distribution methods were altered, to comply with COBRA, the COBRA information would have be appear in quite a conspicuous way in the SPD if it were to qualify as an effective initial notice. And, of course, as someone already mentioned, even when a separate COBRA notice is used, information about COBRA rights must nevertheless appear in the SPD.

[Guest Kim Davis]

We currently mail the Initial Notice to the Employee and "All Eligible Dependents" when an employee becomes eligible, both with the enrollment materials and under seperate cover with USPS Proof of Mailing. COBRA Rights information is also distributed in our employee handbook, and in the Plan Booklets of all our plans that are subject to COBRA except one. The carrier's provided documentation does not include the COBRA rights. We also have 3 additional documents that were drawn up by a legal consultant - Flexible Benefit Plan, Section 125, Welfare Plan (Wrap Document) and Summary Plan Description. Does this Summary Plan Description also need to contain the full language of the COBRA Intial Notice?

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kdavis@atlanticmarine.com