Tip of the Day: COBRA model notice error? No biggie.

Us EBNers got a little nervous this week, after one of us received an e-mail blast screaming of a "Material Error in DOL New Model Notice for COBRA Subsidy."

Long story short, the adviser that sent the message was concerned that in DOL's model notices for notifiying ex-employees of the COBRA subsidy, the election period on the notices doesn't jibe with federal regulations for the subsidy.


According to the rules, a COBRA-eligible ex-worker has 60 days to elect coverage from the date of termination of coverage or the date of the notice, whichever is later. However, DOL’s model notice does not contain language noting the 60-day election period may begin as of the date of termination of coverage.

Thus, the adviser worried, if employers sent a COBRA election package to ex-employees before their group coverage ended, the model notice implies the COBRA election period is shorter than it should be. Such an interpretation could leave employers open to litigation from ex-workers for not allowing the full 60-day election period, as well as on the hook for incurred medical claims.


However, EBN Contributing Editor and benefits attorney Frank Palmieri says, "I do not see it as a 'sky is falling' issue. Most employers do not send the notices early. I don’t see it as an error, but rather that the notice can be improved to address early issuance. Few employers are going to deny COBRA during this transition period, given all the confusion."


Sigh of relief, eh pros? However, that's surely not to say the COBRA subsidy hasn't been a tough issue to wade through. How are you coping? Comment and let me know.