News Archive

"[E]ven though your employee's son is not a COBRA qualified beneficiary (because he was not covered by the plan when he lost eligibility), he is still an 'other individual' to whom you must provide a notice of unavailability. The notice must be written in a manner calculated to be understood by the average plan participant and must explain why the individual is not entitled to COBRA (or an extension of COBRA)."  MORE >>

"Employers often seek to address situations where the waiting period places the company at a competitive disadvantage in recruiting new employees.... In many cases, a practical solution to address this waiting period issue is for the employer to reimburse all or a portion of the employee's COBRA premium for coverage through a prior employer.... Reimbursing the COBRA premium helps offset that expense and facilitate the temporary coverage bridge before enrollment in the new employer's plan."  MORE >>

"Loss of the COBRA subsidy is not a HIPAA special enrollment event to enroll in another employer's plan mid-year. It may therefore be less costly for employees to immediately enroll in their new employer's plan or a spouse's plan because the subsequent full COBRA premium cost can outweigh the initial subsidized savings.... Employers that choose to offer COBRA subsidies should be cautious to consider the potential nondiscrimination issues that can arise, particularly under Section 105(h) for self-insured (including level funded) plans."  MORE >>

"Employers often offer COBRA subsidies that are more generous for certain highly compensated employees. Where self-insured, employers should consider the taxable compensation alternative to avoid nondiscrimination issues under Section 105(h). Where fully insured, employers should consider reservation of rights terms to address potential application of ACA nondiscrimination rules."  MORE >>

"Generally, documents sent by mail are considered timely if they are postmarked on or before the applicable due date. In the past, mail dropped off at the post office or put in a public mailbox before the final pickup time would be postmarked that same day. Under the new process, a same-day postmark is no longer certain."  MORE >>

"[P]lan administrators [should] ... [1] Work with the recordkeeper to ensure participant populations are mapped by regulatory safe harbor used, ... to determine necessary operational changes and, as applicable, confirm that the recordkeeper is making those changes. [2] Ensure that paper statement templates are updated to include the mandatory e-delivery election instructions and plan contact information. [3] Confirm internal or external third-party mailing processes to ensure required disclosures are delivered timely.... [4] Determine whether other administrative processes are impacted by the USPS shift -- such as delivery of claims and appeals decisions, responses to requests for documents, and any other tasks or responses that are required to be provided by a certain date -- and implement, or ensure third parties implement, changes as necessary."  MORE >>

"Should we offer COBRA subsidies? ... What happens to employees' FSA balances after a RIF? ... Could a RIF trigger re-rating or mid-year changes to our benefits plans? ... Do compliance requirements change when our headcount drops? ... What's the best way to communicate benefits information to departing employees? ... How should we support remaining employees after a RIF? ... How can we avoid administrative errors during a RIF? ... When should we bring our benefits advisor into planning a RIF?"  MORE >>

"For plan sponsors, the potential lag between the date when mail is deposited at USPS and when it is actually processed and postmarked creates risk that time-sensitive materials (e.g., COBRA election notices, HIPAA certificates, decisions on benefit claims and appeals, summary plan descriptions, QDIA notices, fee disclosures and other required disclosures) may bear a postmark date later than intended, even if mailed before the deadline."  MORE >>

"USERRA gives continuation rights to employees who [1] have health plan coverage in connection with their employment; and [2] are absent from employment for service in the uniformed services. 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 >>

"The [DOL] and [PBGC] still have not published inflation-adjusted civil monetary penalties for employee benefit plans for 2026.... [T]he 2026 penalties are supposed to be calculated by multiplying the 2025 penalty amounts by the percentage increase in the Consumer Price Index for all Urban Consumers (CPI-U) from October 2024 through October 2025. However, due to the government shutdown, the [BLS] never released CPI-U figures for October 2025. This has left the agencies without a multiplier to apply to their 2025 penalties."  MORE >>

"The court rejected the TPA's request to dismiss the case, allowing several claims to proceed. The court concluded that the participant plausibly alleged deceptive conduct under state law, determining that delayed disclosure of the fee and its characterization as a processing fee rather than an administrative fee could mislead participants, especially when the fee amount exceeded statutory limits. " [Patterson v. Wex, No. 25-8557 (N.D. Calif. Feb. 10, 2026)]  MORE >>

"Plan administrators and service providers will need to take steps to avoid missing a statutory or regulatory deadline.... Alternatives to merely dropping off a filing at the post office would be obtaining a manual postmark, purchasing a certificate of mailing, or using certified or registered mail. These options may be impractical for bulk mailings, but they are options that may be considered in certain situations."  MORE >>

"Other health coverage (including Medicare entitlement) that was in effect before a COBRA election does not disqualify a qualified beneficiary from electing COBRA. And because of the spouse's disability, COBRA coverage must be provided to everyone in the family for an extended period of up to 29 months."  MORE >>

"Employers should review their mail-dependent processes now and consider: [1] building additional lead time into mailing schedules for deadline-sensitive documents, [2] requesting manual postmarks at retail locations for time-critical mailings, or [3] transitioning to electronic delivery where legally permissible."  MORE >>

Seventeen 2026 compliance guides cover common employee health and welfare benefits issues and strategies for employers, including COBRA, HSAs, domestic partner issues, HIPAA, ICHRA, and more.   MORE >>

"Many federal laws create mandates that may apply to your group health plan. Here are some to be aware of: [1] [ACA] ... [2] [MHPAEA] ... [3] Women's Health and Cancer Rights Act (WHCRA) ... [4] Newborns' and Mothers' Health Protection Act (NMHPA) ... [5] [FMLA].... [6] [USERRA] ... [7] Medicare Secondary Payer (MSP) ... [8] Medicare Prescription Drug, Improvement, and Modernization Act (MMA) ... [9] Federal laws prohibiting employment discrimination."  MORE >>

"[It] is important to understand the tax issues affected by your administration of group health plan benefits for employees on leave, particularly for leaves that cross calendar years. If you provide group health benefits and an employee takes approved leave, it is likely that such employee has benefit continuation rights under federal or state law.... Employers have options for collecting premium payments, and each option comes with its own advantages and risks.... IRS guidance has made it clear that an employee cannot make pre-tax payments for premium payments for benefits to be received in a subsequent tax year."  MORE >>

"[The employee] claimed that the inadequate notice caused her to lose health and dental insurance, resulting in medical bills and canceled dental procedures. The court dismissed the case, holding that even if the employee suffered the alleged injuries, she had produced no evidence that the injuries were traceable to the deficient COBRA notice." [Marrow v. E.R. Carpenter Company, Inc., No. 23-2959 (M.D. Fla. Feb. 4, 2025)]   MORE >>

"Count all employees, not just plan participants.... Count only common-law employees.... Count part-time employees.... Count employees of related entities (and successors).... Count employees and related entities outside the United States. "  MORE >>

"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 >>