Organizations with 20 or more employees are legally obligated to offer benefits according to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). This means offering ongoing group health insurance coverage to some employees and their family members after a job loss because of employment termination or another qualifying event, like a reduction of hours. Complying with COBRA requires specific steps from companies, including providing certain information to affected individuals. For many organizations, the model COBRA initial notice (also called the general notice) and the model COBRA election notice can be helpful tools to make sure they’re staying in compliance. How should your organization be using these notices? Let’s take a closer look. Join the thousands of business leaders who receive a monthly email with our trusted advisors’ latest insights, designed to help you make the best decisions for your organization. Subscribe here.
Employers, known as “health plan sponsors” in this context, are legally required to comply with the rules set forth by COBRA for offering and providing continued group health insurance coverage. These health plan sponsors are required to provide general information about COBRA to covered employees when their status changes. This is referred to as the COBRA initial notice (or general notice).
Once an employee’s status changes, such as through termination or drastic reduction of hours, a health plan sponsor that is subject to COBRA requirements must notify its group health plan administrator within the first following 30 days. Within 14 days of that notification, the plan administrator must notify the employee of his or her COBRA rights. This is referred to as the COBRA election notice. In some cases, the health plan sponsor (employer) also serves as the plan administrator. If so, they must issue COBRA notices directly, and the employer then has the complete 44-day period to issue the COBRA election notice.
The DOL provides a model COBRA initial notice and a model COBRA election notice online in an easily customizable form. These can serve as templates for providing these two notices. Plan administrators and health plan sponsors can fill in the blanks of these models with their own information to create their own relevant notices. Organizations are not required to use the COBRA model notices when issuing information, but the DOL considers notices created in this way to be in compliance with COBRA requirements, so using the model notices can be an incredibly effective way to meet the standards placed on your organization. The DOL recently extended the expiration date of the model COBRA initial notice and the model COBRA election notice to January 31, 2026. You can access the model notices here:
The model notices make providing required information simpler, but there are specific steps your company needs to take in order to use them effectively:
The first page of the model COBRA initial notice contains basic details about the notice and information about the Paperwork Reduction Act of 1980 for the use of the plan sponsor, which should be removed before you send it.
The title within the documents of both model notices indicates that it is the model notice, which is “For use by single-employer group health plans.” Edit this section accordingly to re-title the document before sending.
Read the model COBRA initial notice, and scan for blanks to complete with your relevant information. These blanks are indicated with brackets and italics within the document.
To complete the blanks within the COBRA model notices, your organization will need information about the following:
Once blanks within the notice have been filled in, you can edit the presentation if you like (fonts, colors, etc.). Once you are pleased with the presentation, convert the document into a format that isn’t editable before sending, like a PDF.
Since COBRA is a federal law, it’s imperative that employers are compliant to observe this law and provide proper administration on behalf of all COBRA recipients for whom they are responsible.
The administrative responsibilities include:
Noncompliance could result in hefty fines to your company, and if employers don’t offer COBRA or fail to comply with their COBRA administrative responsibilities, employees may sue. In such cases, the court may charge the employer attorney fees if the beneficiary wins the case.
COBRA features layers of complexity that many organizations find daunting. If your company needs more guidance about issuing the COBRA initial notice or COBRA election notice, let us know how we can help. Our qualified HR professionals understand the intricacies of a wide range of compliance matters.
Contact us to learn more about the model COBRA initial notice and the model COBRA election notice and anything else we can do to support your organization.
