Initial COBRA notices satisfied through distribution of the SPD?

[Guest Brook]

Although I saw this question discussed in previous postings, they are a bit old. I am seeking any up-to date info on the requirements for initial COBRA notices, which I understand to be notices provided upon entry into the plan.

Our SPD's contain an extensive COBRA chapter and are provided to all members. Is this sufficient under the current regs?

I noticed some people considered distribution of the SPD to the new member insufficient, on the grounds that the spouse might not see it. In the context of notices provided due to triggering events (loss of job, etc.), I was under the impression one notice mailed to the member's current address was sufficient, unless a dependent was known to reside at a different address.

As you have probably gathered, we do not send these initial notices, relying instead on distribution of the SPD.

Any opinions?

[jeanine]

I beleive that notice via the SPD is insufficient for precisely the reason you give, the spouse may or may not receive notice. However, all is not lost even though you did not send initial notices. If your company agrees, send a new notice to home addresses now. We did this for all our clients for whom we administer COBRA when we were trying to put together a COBRA manual and realized we could not prove we sent initial notices in all cases. What made this easier for us to produce and send (without scaring the enrollees into thinking they were in danger of termination) was the new COBRA 2000 rules. We used this opportunity to update the COBRA notice and clarify the changes. Took a little time and money but now we can verify we are compliant.

[Guest Brook]

Sounds lika a good idea. Could you tell me where to locate the new 2000 COBRA rules?

[jeanine]

Probably the best thing to do is log on to the benefitslink homepage then go to benefits buzz. Scroll to the bottom of the page and click on older benefits buzz. It will take you back a week at a time. You will probably have to go back to at least March. There are some very good articles that explain the rules. Otherwise, this was (I think) IRS regulations that took effect Jan. 1, 2000 so they might have the complete rules on their website. Check benefitslink first though. This is where I got most of my information.

[Guest kclark]

We were thinking of including the Initial COBRA Notice in our new hire enrollment kit that we provide to all newly eligible employees......would that be sufficient?

We are a Church Plan, and therefore, aren't really governed by COBRA regulations, but like to comply as closely as possible.

Thanks,

Kathy

[Linda]

See the Preamble to the new regs on the content of summary plan descriptions. Here, the DOL repeats its position that the initial notice should be mailed to the employee's home, addressed to the employee and spouse. If you want (but who does), you can mail the SPD which includes the COBRA information. Otherwise, you mail the initial COBRA notice.

[Greg Judd]

Originally posted by jeanine

Probably the best thing to do is log on to the benefitslink homepage....a week at a time.  You will probably have to go back to at least March.  

This Benefitslink reference may save you a bunch of clicking & pecking. Looks like DOL's looking for both SPD distribution and a separate initial notice (a few paragraphs into the linked article).

[Guest Damien]

Does anyone have an opinion on this in regards to self-funded group health plans that have merely switched TPA's?

Would the new TPA be obligated to send notices to all members if it discovered that had never been done, either by the prior TPA or the employer itself?

We have a lot of clients come in with existing plan docs, and they frequently decline the expense of restating. Of course we draft an amendment listing ourselves as the new TPA and usually the COBRA administrator as well. Is anyone aware of any further requirements in regards to COBRA compliance?

[Kirk Maldonado]

Damien:

Does the engagement letter between the client and the TPA provide any useful information on this point?

[Guest glevins1]

With respect to the question whether the initial COBRA notice requirement may be satisfied by providing the information in the plan's SPD, the preamble to the DOL's final regulations, issued 11/21/00 (Reg. 2520.102-3(o)), states that the notice should be provided in the SPD "at the time coverage commences under the plan," rather than within 90 days of an individual becoming a plan participant or beneficiary (as required for SPDs generally under ERISA Sec. 104(B)(1)). [65 Fed. Reg. 225 (11/21/00), pps. 70,229-70,230].

[Guest Chuck Miller]

The DOL booklet on COBRA says:

Generally, an initial notice describing COBRA rights

must be furnished to covered employees and their

spouses at the time coverage under the plan commences.

I would take the general COBRA description you have in your SPDs (hopefully) and distribute that as your initial notice And you could distribute the notice by email, inter office mail, or regular mail home.

If you want some help with COBRA try

http://www.dol.gov/dol/pwba/public/guide.htm and scroll down to

Health Benefits Under the Consolidated Omnibus Budget Reconciliation Act (COBRA) (PDF).