News Archive

"The court ... [noted] that the duty of notification ultimately lies with the employer, which was also the plan administrator, even if a third-party company is designated to disseminate COBRA notices, because the employer cannot unilaterally delegate its fiduciary duty to a party that has no discretionary authority and is not a fiduciary." [Casillas-Guardiola v. Bayer Puerto Rico, Inc., No. 22-1167 (D. P.R. Sep. 30, 2025)]  MORE >>

"ERISA's COBRA provisions generally do not apply to a group health plan sponsored by an Indian tribal government if the plan qualifies as a governmental plan. For this exemption to apply, all participants must be employees of the tribal entity, and substantially all of their services must be in the performance of essential governmental functions -- not commercial activities such as operating a casino or hotel.... [B]ased solely on the facts in the opinion, the Tribe's reliance on COBRA's gross misconduct exception seems shaky at best." [Meilstrup v. Standing Rock Sioux Tribe, No. 25-0162 (D.N.D. Oct. 9, 2025)]  MORE >>

"File Form 8928 to report the tax due on the following failures by group health plans or employers. [1] A failure to provide a level of coverage of the costs of pediatric vaccines ... that is not below the coverage provided as of May 1, 1993. [2] A failure to satisfy continuation coverage requirements under section 4980B. [3] A failure to meet portability, access, renewability, and market reform requirements ... [4] A failure to make comparable Archer medical savings account (MSA) contributions ... [5] A failure to make comparable health savings account (HSA) contributions[.]"  MORE >>

"[T]he Medicare terms 'eligibility' and 'entitlement' are not synonymous, and it is important to understand the difference. 'Entitlement' means that an individual who is eligible for Medicare has actually enrolled in Medicare and may currently receive benefits. An individual who must take additional steps to enroll in Medicare before receiving benefits is not yet 'entitled' to Medicare for purposes of the COBRA rules."  MORE >>

"While many plans contract with TPAs to provide election notices to qualified beneficiaries, TPAs rarely agree to serve as the plan administrator, so the employer typically remains liable for any failure to provide timely notices. Plan administrators using a TPA to send election notices should verify that the TPA will maintain adequate documentation of what was mailed and when and will agree to indemnify the employer for any failure to properly provide required notice." [Casillas-Guardiola v. Bayer Puerto Rico, Inc., No. 22-1167 (D. P.R. Sep. 30, 2025)]  MORE >>

"If the enhanced subsidies is reduced because Congress does not extend these enhancements, this will increase the cost of the underlying ACA Exchange plan for the employee/dependent.... This increased cost to the ACA plan could convince an employee/dependent to elect COBRA coverage, even though the employee/dependent is paying 102% of the premiums.... Another consideration here is that if the enhanced premium subsidies are not extended, then an employee or dependent with income above 400% of the Federal Poverty Level (FPL) will no longer be eligible for a premium subsidy."  MORE >>

"The departure of an employee, regardless of the reason, sets off a chain of events affecting wages, bonuses, equity awards, retirement benefits, health coverage, and other company-sponsored programs. The manner in which each of these benefits is handled will depend on the termination circumstances, the precise language of the governing documents, and the applicable legal requirements. Mistakes can be costly ... so it is essential to approach each dismissal situation with care and consistency."  MORE >>

"Employees or dependents are required to notify the plan within 60 days upon a loss of coverage caused by divorce or legal separation or loss of eligible dependent child status. They also have a 60-day notice requirement to notify the plan of a SSA disability determination (to extend to 29 months) or a second qualifying event (to extend to 36 months)."  MORE >>

"The trial court noted that the employer was aware at the time it mailed the election notice that the address may have been inaccurate and thus held that the employer did not timely provide the notice. Nevertheless, the court exercised its discretion not to impose penalties because, with more than two years of employer-paid coverage, the employee was 'better off' than if she had received a timely notice and paid for the continued coverage herself. On appeal, the Eleventh Circuit agreed[.]" [Thibodeaux v. City of Atlanta, No. 24-12921 (11th Cir. Sep. 2, 2025; unpub.)]  MORE >>

"The plan may take different approaches to handling coverage during this interim COBRA election/premium period. Regardless of the plan's approach, upon a timely COBRA election and initial premium payment the qualified beneficiary will have continuous and seamless coverage retroactive to the date active coverage ended."  MORE >>

"USERRA requires health plans to offer continuation coverage under certain circumstances.... But your former employee will not be entitled to USERRA coverage under your plan because he was not employed by your company when he was called to active duty -- his uniformed service did not cause him to be absent from employment with your company."  MORE >>

"After making the initial premium payment, qualified beneficiaries must make the subsequent premium payments by the end of a 30-day grace period for each month of coverage. If there is an insignificant shortfall in the premium amount paid, the plan generally must provide a notice of deficiency and a 30-day period for the qualified beneficiary to pay the remaining balance."  MORE >>

"[I]ndividuals who elect to continue health FSA coverage through COBRA are generally only required to have this coverage extended through the plan year in which their qualifying event occurs. However, if the employer’s cafeteria plan allows for a carryover (currently up to $660 in 2025), a qualified beneficiary will still have access to this carryover amount in the following plan year, or if earlier, until the end of their maximum COBRA period.... The cost of coverage for the health FSA will be the amount of contributions elected by the employee for the plan year. "  MORE >>

"The notice of unavailability of continuation coverage is required in certain situations to inform individuals that they are not entitled to COBRA. The notice of termination of continuation coverage is required in certain situations to inform qualified beneficiaries when their right to COBRA has ended prior to the expiration of the maximum coverage period."  MORE >>

"How to be generous -- safely ... [1] Coordinate with legal and tax advisors before offering anything outside your standard policies. [2] Document the intent and structure of any payments. [3] Communicate clearly.... [D]evelop a formal process/checklist based on your employee population to help HR and payroll teams stay compliant, compassionate, and clear-headed."  MORE >>

"[E]ach qualified beneficiary has an independent right to elect COBRA. For example, the covered spouse or child may continue coverage through COBRA even if the employee is declining COBRA.... Independent election rights can create some unusual scenarios in COBRA that do not occur in active coverage.... [T]he IRS has issued guidance that addresses the amount that employers can charge for the COBRA premium. "  MORE >>

"COBRA requires only that the plan administrator mail the notice to the qualified beneficiary's last-known address. But courts have applied 'inquiry notice' and 'fiduciary responsibility' theories to impute to plan administrators knowledge that a qualifying event has occurred, and those theories could be extended to a returned election notice when a plan administrator knows that a notice has not been received."  MORE >>

"This article addresses the tensions employers face when an employee loses valid work authorization or is discovered to have used false identity documents.... [A] termination of employment with a loss of health plan coverage usually triggers a legal obligation to offer continuation coverage. This can leave employers questioning whether offering COBRA to someone now unlawfully present could violate immigration law.... Employees who lose TPS or other temporary work authorization present a particular challenge."  MORE >>

"The District Court reasoned that although Cal-COBRA is a state law, the continuation coverage was an extension of an ERSA-governed plan. As a result, once Owens elected continuation coverage, she remained a participant in the original Frederickson plan, and any claims related to that plan -- even during the continuation period -- fall under ERISA's exclusive regulatory regime." [Owens v. Blue Shield of California, No. 24-0400 (N.D. Calif. Mar. 20, 2025)]  MORE >>

"Ordinarily, employers are only required to provide coverage under COBRA that is the same as the coverage the qualified beneficiary had on the day before the qualifying event ... [T]here is an exception for certain region-specific plans such as HMO plans ... If certain criteria are met, the employer must allow a qualified beneficiary to elect coverage under another plan of the employer that provides coverage in the new location."  MORE >>

"The court ruled that a mere 'good faith effort' to comply with COBRA notice requirements is an insufficient reason to dismiss a lawsuit from a former employee, claiming that a defective COBRA notice ... influenced her decision to reject continuation coverage.... The employer did not use DOL's Model COBRA notice and instead provided a notice that, among other things, provided incorrect or inconsistent information about the time frame for her to make an election and the required time for making COBRA payments." [Marrow v. E.R. Carpenter Company, Inc., No. 23-2959 (M.D. Fla. Feb. 4, 2025)]  MORE >>

"Coverage ends at divorce ... Section 125 plan considerations ... COBRA and the 60-day rule ... Is retroactive cancellation a problem?"  MORE >>

"[T]he employer did not use [DOL's] Model COBRA notice, and instead, provided a notice that, among other things, provided incorrect or inconsistent information about the time period for her to make an election and the required time for making COBRA payments.... [The employee] claimed that her failure to enroll in COBRA continuation coverage was due to deficiencies in the employer's COBRA notice." [Marrow v. E.R. Carpenter Company, Inc., No. 23-2959 (M.D. Fla. Feb. 4, 2025)]  MORE >>

"While we don't know the exact number of class action plaintiffs, we do know that Ms. Marrow was one of three covered participants in her family.... For the Marrows alone, this would amount to $452,100 ... The plaintiffs argue that the COBRA notice incorrectly stated that qualifying beneficiaries had 60 days from their last day of employment to elect COBRA continuation coverage.... The plaintiffs also argue that expressing the deadline as a number of days from a specific date requires qualified beneficiaries to perform calendar calculations." [Marrow v. E.R. Carpenter Company, Inc., No. 23-2959 (M.D. Fla. Feb. 4, 2025)]  MORE >>

"While the employer argued that the employee did not establish an injury that can be traced to the allegedly improper notice, the court concluded that the employee had done enough to establish her claims at this stage. The court also ruled that the 'good faith' standard no longer applies to employer distribution of effective COBRA notices, emphasizing that the notice must meet specific legal standards established by the [DOL] regulations." [Marrow v. E.R. Carpenter Company, Inc., No. 23-2959 (M.D. Fla. Feb. 4, 2025)]  MORE >>