[Federal Register Volume 62, Number 184 (Tuesday, September 23, 1997)]
[Proposed Rules]
[Pages 49894-49898]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-25240]
[[Page 49893]]
_______________________________________________________________________
Part IV
Department of Labor
_______________________________________________________________________
Pension and Welfare Benefits Administration
_______________________________________________________________________
29 CFR Part 2580
Health Care Continuation Coverage; Proposed Rule
Federal Register / Vol. 62, No. 184 / Tuesday, September 23, 1997/
Proposed Rules
[[Page 49894]]
DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
29 CFR Part 2580
Health Care Continuation Coverage
AGENCY: Pension and Welfare Benefits Administration, Labor.
ACTION: Request for information.
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SUMMARY: This document is a request for information to assist the
Department of Labor (the Department) in assessing the need for a
regulation clarifying certain statutory notice requirements set forth
in section 606 of Title I of the Employee Retirement Income Security
Act (ERISA) and in section 4980B of the Internal Revenue Code (the
Code). These statutory notice requirements were enacted as part of the
continuation coverage provisions included in the Consolidated Omnibus
Budget Reconciliation Act of 1985 (COBRA). The continuation coverage
provisions, commonly referred to as the COBRA provisions, generally
require group health plans to provide participants and beneficiaries
who under certain circumstances would otherwise lose coverage
(qualified beneficiaries) with the opportunity to elect to continue
coverage under the plan at group rates for a limited period of time.
The Department anticipates that information and views provided by
plan sponsors, plan fiduciaries, service providers to plans, plan
participants and beneficiaries, and other interested persons will aid
it in assessing the need for issuing a regulation to explicate the
notice requirements of the COBRA provisions and the appropriate scope
and content of any such regulation. A regulation on the notice
requirements of the COBRA provisions would affect participants and
beneficiaries (including qualified beneficiaries) of certain group
health plans, as well as the sponsors and fiduciaries of such plans.
DATES: Written comments should be received by the Department of Labor
on or before November 24, 1997.
ADDRESSES: Comments (preferably, at least six copies) should be
addressed to the Office of Regulations and Interpretations, Pension and
Welfare Benefits Administration, Room N-5669, U.S. Department of Labor,
200 Constitution Ave., NW, Washington, DC 20210. Attn: COBRA RFI. All
comments received will be available for public inspection at the Public
Disclosure Room, Pension and Welfare Benefits Administration, U.S.
Department of Labor, Room N-5507, 200 Constitution Ave., NW,
Washington, DC 20210.
FOR FURTHER INFORMATION CONTACT: David Lurie, Office of Regulations and
Interpretations, Pension and Welfare Benefits Administration, (202)
219-7461. This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
A. Background
1. The COBRA Provisions
The COBRA provisions, sections 601 to 608 of Title I of ERISA, and
the related portions of section 4980B of the Code,1
establish the requirement that any ``group health plan'' 2
maintained by an employer that employs 20 or more employees must offer
``qualified beneficiaries'' 3 the opportunity to elect
``continuation coverage'' under the plan following certain events
(qualifying events) that would otherwise result in the loss of
coverage.4
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\1\ All references herein to ERISA sections 601-608 should be
read to refer also to corresponding provisions in Code section
4980B.
\2\ The term group health plan is defined in section 607(1) to
mean an employee welfare benefit plan providing medical care (as
defined in section 213(d) of the Code) to participants or
beneficiaries directly or through insurance, reimbursement, or
otherwise. Plans that provide substantially only long-term care
services (as defined in section 7702B(c) of the Code, however, are
not included. Further, although governmental plans are excepted from
coverage under Title I of ERISA, see ERISA section 4(b)(1), COBRA
amended the Public Health Service Act, 42 U.S.C. Sec. 300bb-1 et
seq., to impose requirements for the provision of health care
continuation coverage similar to those contained in Part 6 of Title
I on certain State and local employers.
\3\ Section 607(3) defines qualified beneficiary generally as
any person, other than a covered employee, who, on the day before
the qualifying event for that employee, was a beneficiary under the
plan as the spouse or dependent child of the covered employee. In
the case of a qualifying event that is the termination or reduction
of hours of the covered employee, the term also includes the covered
employee. In the case of a qualifying event that is the bankruptcy
of the plan sponsor, the term qualified beneficiary includes the
covered employee if he or she had retired on or before the date of
substantial elimination of coverage, and any individual who, on the
day before the qualifying event, was a beneficiary under the plan as
the surviving spouse of the covered employee. The Health Insurance
Portability and Accountability Act of 1996 (HIPAA) expanded the
definition of qualified beneficiary contained in section 607(3) to
include children who are born to or placed for adoption with the
covered employee during the duration of continuation coverage.
\4\ Section 603 defines a qualifying event as any of the
following: 1) the death of the covered employee; 2) the termination
(other than by reason of gross misconduct) or reduction in hours of
the covered employee's employment; 3) the divorce or legal
separation of the covered employee from the employee's spouse; 4)
the covered employee's becoming entitled to benefits under Medicare;
5) a dependent child's ceasing to be a dependent under the terms of
the plan; or 6) the bankruptcy of the employer from which the
covered employee retired. Section 607 defines other relevant terms,
such as ``covered employee'' and ``group health plan,'' for the
purposes of the COBRA provisions.
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Under section 602(2)(A), the nature of the qualifying event
determines the length of continuation coverage that an employer must
make available to a qualified beneficiary. If the qualifying event is
either a termination or a reduction in the hours of the covered
employee's employment, the period of continuation coverage is up to 18
months from the date of the qualifying event.5 This period
is extended for an additional 11 months, to make a total period of 29
months of continuation coverage, for all qualified beneficiaries with
respect to a covered employee, if any of such qualified beneficiaries
has been determined, pursuant to Title II or Title XVI of the Social
Security Act, to have been disabled at any time within the first 60
days of continuation coverage.6 Furthermore, in cases
involving a termination or reduction of hours of employment, the
occurrence of another qualifying event during the initial 18 months of
continuation coverage will extend the continuation coverage period to
up to 36 months from the date of the original qualifying event. In all
other cases, the period of continuation coverage is generally up to 36
months from the date of the qualifying event. The occurrence of certain
events subsequent to election of continuation coverage can cause the
period of continuation coverage to end prior to the end of the
otherwise applicable continuation coverage period.7
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\5\ A group health plan may, pursuant to section 607(5), provide
instead that the period of continuation coverage (and the period
during which the employer must notify the plan administrator of a
qualifying event) will begin on the date the qualified beneficiary
loses coverage, rather than the date of the qualifying event.
\6\ Prior to enactment of HIPAA, section 602(2) provided that a
qualified beneficiary would be entitled to the 11-month disability
extension only if he or she was disabled at the time that the
covered employee suffered the termination or reduction in hours of
employment. HIPAA also amended section 602(2) to clarify that the
11-month disability extension applies to the non-disabled family
members of a disabled qualified beneficiary who meets the
requirements for the extension, provided those family members are
also entitled to continuation coverage.
\7\ For example, a qualified beneficiary's right to continuation
coverage will cease if an employer ceases to provide group health
coverage to its employees, if the qualified beneficiary fails to pay
required premiums in a timely fashion, or if the qualified
beneficiary becomes covered under another group health plan that
does not contain any invalidating pre-existing condition exclusions
or limitations. See Sec. 602(2) (B), (C), (D).
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The COBRA provisions specify the nature of the continuation
coverage that must be offered, the premiums that a qualified
beneficiary may be required to pay as a predicate for such continuation
coverage, and the manner in which plan administrators must provide
qualified
[[Page 49895]]
beneficiaries with the opportunity to elect continuation coverage and
to pay any required premiums. See sections 602, 604, 605.
Section 606 establishes a series of related notice requirements
that ultimately trigger, under section 605, the beginning of the period
of time during which the qualified beneficiary may elect continuation
coverage (the election period). These notice requirements are described
in detail in Section 2, below.
Section 608 grants the Secretary of Labor generally the authority
to issue regulations to carry out the provisions of Part 6 of Title I
of ERISA. In order to avoid duplicate and perhaps inconsistent
regulations, the Conference Report accompanying COBRA 8
provides that the Secretary of Labor is authorized to promulgate
regulations implementing the disclosure and reporting requirements of
COBRA, while the Secretary of the Treasury is authorized to issue
regulations defining the required continuation coverage.9
The Conference Report further stated that pending the promulgation of
regulations, employers would be required to operate ``in good faith
compliance with a reasonable interpretation of the substantive rules
and notice requirements' H. Rep. 99-453 at 562-63.
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\8\ H. Rep. No. 99-453, 99th Cong., 1st Sess. (December 18,
1995).
\9\ The Conference Report indicates further that the Secretary
of Health and Human Services, who is to issue regulations
implementing the continuation coverage requirements for State and
local governments, must conform the actual requirements of those
regulations to the regulations issued by the Secretaries of Labor
and the Treasury. Id. at 562-63. Pursuant to its authority, the
Treasury Department has proposed certain regulations relating to
continuation coverage. See Prop. Treas. Reg. Sec. 1.162-26 (52 Fed.
Reg. 22716, June 15, 1987).
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2. COBRA Notices
Section 606 of ERISA provides for a series of related notices,
beginning with the requirement for a general notice of the rights
provided under COBRA and culminating with an individualized notice to a
qualified beneficiary entitled to elect continuation coverage.
(a) Initial Notice. Section 606(a)(1) requires a group health plan
to provide to each covered employee and spouse of the employee (if any)
at the time of commencement of coverage under the plan 10 a
written notice describing the rights provided under COBRA.11
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\10\ Advisory Opinion 94-17 (April 9, 1994) states that a group
health plan is required to provide the initial notice required by
section 606(a)(1) only to individuals who may at some time become
entitled to elect continuation coverage under the plan, i.e.,
someone who is or becomes covered under the plan. Accordingly, a
group health plan is required to provide the initial notice to a
covered employee's spouse only if, and at the time, the spouse
commences coverage under the plan.
\11\ On June 26, 1986, the Department issued ERISA Technical
Release 86-2 (TR 86-2), ``Guidance on Group Health Continuation
Coverage Notification Provisions,'' to provide for use by employers
a model initial notice satisfying the requirements of section
606(a)(1). TR 86-2 emphasizes that use of the model notice is not
the only method of achieving good faith compliance with a reasonable
interpretation of the initial notice requirement. Additionally, TR
86-2 provides guidance with respect to certain procedural issues not
addressed by the statute and the Department's view of good faith
compliance in the absence of regulations. First, TR 86-2 states that
sending a notice by first-class mail to the last known address of a
covered employee and his or her spouse (if any) would evince a good
faith effort at compliance. Second, TR 86-2 states that, if a
spouse's last known address is the same as the covered employee's, a
single mailing addressed to both would be considered to be in good
faith compliance with the requirement set forth in 606(a)(1).
Finally, TR 86-2 states that if an employer (or plan administrator)
determines that a spouse no longer resides with the covered
employee, good faith compliance could be achieved by a separate,
first-class mailing to the last known address of the spouse.
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(b) Notice of Qualifying Event. Section 606 (a)(2) and (a)(3)
require that the plan administrator of a group health plan be notified
that a qualifying event has occurred. The nature of the qualifying
event determines whether this notice obligation falls on the employer
of a covered employee or on the covered employee or qualified
beneficiary. If the qualifying event is the death of the covered
employee, the termination or reduction of hours of the covered
employee's employment,12 the covered employee's becoming
entitled to Medicare, or a bankruptcy proceeding of the employer,
section 606(a)(2) requires the employer of the covered employee to
provide notice of the qualifying event to the plan administrator. The
employer must provide this notice within 30 days of the date the event
occurs.13 If the qualifying event is the divorce or legal
separation of the covered employee or a dependent child's ceasing to be
a dependent under the terms of the plan, section 606(a)(3) requires the
covered employee or qualified beneficiary to provide the notice of
qualifying event to the plan administrator.14 The covered
employee or qualified beneficiary must provide this notice within 60
days of the date the qualifying event occurs.15
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\12\ In the case of a multiemployer plan, the requirement that
the employer notify the plan administrator of the termination or
reduction in hours of the covered employee's employment is satisfied
if the plan provides that the plan administrator will determine the
occurrence of such a qualifying event.
\13\ If the plan is a multiemployer plan, this notice must be
given within the time period set by the plan.
\14\ Prop. Treas. Reg. Sec. 1.162-26, Q&A 33, states that this
notice is to be provided to the ``employer or other plan
administrator.''
\15\ Prop. Treas. Reg. Sec. 1.162-26, Q&A 33, states that if the
notice is not sent to the employer or other plan administrator
within 60 days after the later of the date of the qualifying event
or the date that the qualified beneficiary would lose coverage, the
group health plan does not have to offer the qualified beneficiary
continuation coverage.
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(c) Notice of Right to Elect Continuation Coverage. Section
606(a)(4) requires a plan administrator to notify qualified
beneficiaries of their right to elect continuation
coverage.16 This notice must be provided within 14 days of
the date on which the administrator receives the notice that a
qualifying event has occurred.17 Pursuant to section 605(1),
a qualified beneficiary must be provided a period of at least 60 days,
beginning on the later of the date of the loss of coverage due to the
qualifying event or the date the notice of the right to elect
continuation coverage was sent, within which to elect continuation
coverage.
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\16\ Advisory Opinion 90-16 (May 3, 1990) states that the
administrator of a group health plan cannot be relieved, by
delegation, contract, or otherwise, of responsibility for providing
the notice required by section 606(a)(4).
\17\ In an information letter dated April 11, 1995, the
Department stated that, in cases in which the employer of employees
covered by a group health plan is also the plan administrator, both
the 30-day notice period for the employer's notice of a qualifying
event and the 14-day period for the administrator's notice of the
right to elect continuation coverage would continue to apply.
Accordingly, an employer who is also the plan administrator has a
maximum period of 44 days from the date on which the qualifying
event occurred to provide such notice.
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(d) Social Security Disability Notice. Section 602 provides that,
if a qualified beneficiary becomes disabled, as determined under Title
II or XVI of the Social Security Act, at any time during the first 60
days of continuation coverage, he or she is entitled to a total of up
to 29 months of continuation coverage, rather than only 18 months of
continuation coverage. Section 606(a)(3) provides that, in order to
obtain the 11-month extension, such a qualified beneficiary must notify
the plan administrator of the determination of disability within 60
days after the date of such determination. Section 602 also requires
that this notice be provided before the end of the original 18-month
period of continuation coverage. The qualified beneficiary must also
notify the plan administrator of any final determination that the
qualified beneficiary is no longer disabled. This notice must be
provided within 30 days of the date of such determination.
[[Page 49896]]
3. Statutory Sanctions for Failure to Comply With COBRA Notice
Requirements
The COBRA provisions impose sanctions for failure to comply with
certain of the notice requirements of ERISA section 606.
a. ERISA Section 502
Section 502(a)(1)(A) of ERISA permits participants and
beneficiaries to bring a civil action for the relief provided in
section 502(c). Section 502(c)(1) provides that a plan administrator
that fails to provide an initial notice or a notice of the right to
elect continuation coverage may, in the court's discretion, be held
liable to the participant or beneficiary for up to $100 per day from
the date of the failure to provide notice and for any other relief that
the court deems proper.
b. Code Section 4980B
Code section 4980B imposes excise taxes on the
employer,18 and, in certain circumstances, a person (other
than an employee) who is responsible for administering or providing
benefits under the plan and whose act or failure to act caused the
failure, for the failure of a group health plan to meet any of the
requirements of the COBRA provisions, including the relevant notice
requirements. Pursuant to section 4980B(b)(1), the amount of the tax on
any failure with respect to a qualified beneficiary is $100 per day
19 for each day of non-compliance. Code section 4980B(b)
establishes a number of standards relating to minimum and maximum
amounts of tax and specifies situations in which the tax will not be
imposed.
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\18\ In the case of a multiemployer plan, the tax is imposed on
the plan.
\19\ If there is more than one qualified beneficiary with
respect to the same qualifying event, the maximum amount of tax that
may be imposed on all failures on any day with respect to such
qualified beneficiaries is $200.
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4. Health Insurance Portability and Accountability Act (HIPAA)
HIPAA, which was signed into law on August 21, 1996, made certain
substantive changes to the COBRA provisions. Those changes became
effective January 1, 1997, regardless of the date of any qualifying
event. Among other changes,20 HIPAA amended section
602(2)(D)(i), with respect to circumstances under which a group health
plan may cease providing continuation coverage to a qualified
beneficiary because that qualified beneficiary has become covered under
another group health plan, to reflect the changes made by HIPAA with
respect to preexisting condition exclusions and limitations.
Specifically, the COBRA provisions mandate that, if the new plan limits
or excludes coverage for any preexisting condition of the qualified
beneficiary, the plan providing continuation coverage cannot cease
making continuation coverage available solely due to the coverage under
the new plan. However, HIPAA provides that, if the new group health
plan limits or excludes coverage for preexisting conditions, but those
limits or exclusions would not apply to or would be satisfied by a
qualified beneficiary under the HIPAA rules limiting pre-existing
coverage exclusions, the plan providing continuation coverage may cease
providing it. As a separate matter, HIPAA provides that the amount of
an individual's ``creditable coverage'' (see footnote 21) must include
any period of time during the relevant look-back period for which the
individual was covered by a group health plan as a result of the
individual's having elected continuation coverage.
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\20\ As described in footnotes 2 and 4, above, HIPAA clarified
the definition of ``qualified beneficiary'' and the scope of the 11-
month extension for disabled qualified beneficiaries. In addition,
section 421(e) of HIPAA required group health plans subject to COBRA
to notify individuals who have elected continuation coverage no
later than November 15, 1996, of the changes to COBRA enacted by
HIPAA. The Department issued Technical Release 96-1 on October 15,
1996, to inform employers and plan administrators of the changes in
the COBRA rules made by HIPAA and of their obligation under HIPAA to
notify qualified beneficiaries of such changes. The Department, as a
matter of enforcement policy, deemed that supplying qualified
beneficiaries with a written copy of the information contained in TR
96-1, or with a copy of TR 96-1, would constitute compliance with
the notice requirement contained in section 421(e) of HIPAA if the
information was sent to each qualified beneficiary by first class
mail at the last known address of the qualified beneficiary by
November 1, 1996.
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5. Interim HIPAA Regulations
On April 8, 1997, the Department, in conjunction with the IRS and
the Health Care Financing Administration of the Department of Health
and Human Services, published in the Federal Register interim rules and
a proposed rule implementing certain provisions of HIPAA (62 FR 16894).
The Department's interim regulation relating to certificates of
creditable coverage,21 29 CFR 2590.701-5 (62 FR 16946,
16947), provides that a qualified beneficiary is entitled to a
certificate both at the time that coverage would be lost in the absence
of continuation coverage and, if the qualified beneficiary has elected
continuation coverage, at the time that the continuation coverage
ceases. In addition, in cases in which the person is entitled to elect
continuation coverage, the first certificate must be furnished no later
than the time a notice of the right to elect continuation coverage is
required to be provided. The second certificate, after continuation
coverage ceases, must be provided within a reasonable time after
continuation coverage ceases.
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\21\ Pursuant to ERISA section 701, which was added by HIPAA,
certificates of creditable coverage are required to be provided to
participants and beneficiaries under group health plans under
certain circumstances. These certificates serve to establish a
participant's or beneficiary's period of ``creditable coverage,''
which will reduce or eliminate the period for which a group health
plan can limit or exclude coverage of a preexisting condition of
such participant or beneficiary.
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B. Circumstances Suggesting a Need for Regulatory Guidance
As discussed herein, the COBRA provisions of ERISA impose
obligations on employers, plan administrators, plan participants, and
qualified beneficiaries regarding disclosure of information through
notices and the ensuing right to elect continuation coverage. Section
606 of ERISA provides a statutory framework within which these notices
have significance as a means of providing affected parties with
adequate notice at appropriate times of the rights granted under the
statutory scheme. The delivery of notices also delineates limited time
periods during which such rights must be exercised. Failure to comply
with any of the notice requirements carries consequences for the party
failing to provide notice, whether in the form of potential liability
to provide coverage under the group health plan, sanctions imposed on
employers or plan administrators, or a loss of coverage or an
opportunity to elect continuation coverage on the part of qualified
beneficiaries. The Department believes the following factors suggest a
possible need for guidance concerning the COBRA notice provisions.
First, a significant amount of the relevant litigation that has
occurred since enactment of the COBRA provisions has involved failures
or alleged failures to comply with the notice
requirements.22 Second, many of the numerous requests that
the Department has received from participants for assistance with the
COBRA provisions have involved
[[Page 49897]]
allegations that employers' and plan administrators' notices have been
not forthcoming or have been inadequate or confusing. Third, the COBRA
provisions have been amended several times since publication of TR 86-
2, reducing its value as a model for good faith compliance. Fourth, the
obligations imposed on group health plans by HIPAA and other
legislation with respect to coordination of continuation coverage with
other statutory rights have further increased the importance of proper
implementation of the COBRA notice provisions. For these reasons, the
Department believes that regulatory guidance clarifying the notice
requirements may aid employers and plan administrators in complying
with the COBRA notice requirements and may also provide participants
and beneficiaries with a better understanding of their rights and
obligations.
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\22\ See, e.g., Underwood v. Fluor Daniel, Inc., No. 95-3036
(4th Cir. 1997); Stanton v. Larry Fowler Trucking, Inc., 52 F.3d 723
(8th Cir. 1995); Bixler v. Central Pennsylvania Teamsters Health &
Welfare Fund, 12 F.3d 1292 (3rd Cir. 1993); Meadows v. Cagle's,
Inc., 954 F.2d 686 (11th Cir. 1992); Kidder v. H&B Marine, Inc., 932
F.2d 347 (5th Cir. 1991); Truesdale v. Pacific Holding Co./Hay Adams
Division, 778 F. Supp. 77 (D.D.C. 1991).
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C. Issues on Which Information is Requested
To assist the Department in assessing the need for guidance
concerning the COBRA notice requirements, the Department invites
interested parties to submit information relating to whether the
Department should promulgate standards with regard to the content of
the notices, the delivery and timing of these notices, and the
consequences of either satisfying or failing to satisfy the notice
requirements, and what such standards should be.
In order to assist interested parties in responding, this notice
contains a list of specific questions the answers to which the
Department believes would be helpful in considering guidance in this
area. It is requested that the public, in responding to specific
questions presented by this Notice, refer to the question number listed
in this Notice. Reference to the appropriate question number will aid
the Department in analyzing submissions.
The questions provided herein may not address all issues relevant
to the development of the regulation. Accordingly, the Department
further invites interested parties to submit additional comments on any
other matters that they believe may be pertinent to the Department's
consideration of guidance on this subject.
Specific areas with respect to which the Department is interested
include:
I. Initial Notice to Covered Employees and Spouses
A. What information should be required to be included in the
initial notice to covered employees and spouses?
B. Would ``model'' language with respect to any of the required
information be helpful?
C. Should the Department provide an updated, revised ``model''
notice to replace that published in TR 86-2?
D. In TR 86-2, the Department indicated that furnishing one initial
notice to participants and spouses residing at the same address would
be adequate. Should the Department continue to view this method of
furnishing information to a spouse residing with a participant as
sufficient?
II. Notice of Qualifying Event
A. What information should be required to be included in the notice
of qualifying event?
B. In what form should this notice be required to be provided?
C. Should the required information or the required form in which
this information is conveyed vary depending on whether the notice is
being given by the employer or by the covered employee (or qualified
beneficiary)?
D. Should the Department provide rules under which notice of a
qualifying event is deemed to have been given when an employer is also
the plan administrator of a group health plan, or should some formality
of communications be required under such circumstances?
E. Should the Department provide a ``model'' notice of qualifying
event for use by employers and qualified beneficiaries?
F. What, if any, problems have arisen in connection with compliance
with this notice requirement?
III. Notice of Right to Elect Continuation Coverage
Section 605 of the COBRA provisions provides that the election
period during which a qualified beneficiary may elect continuation
coverage must extend for at least sixty days, measured from the later
of the date on which coverage otherwise would terminate or the date on
which the notice of the right to elect continuation coverage is sent to
the qualified beneficiary. The plan administrator's provision of the
notice of right to elect continuation coverage, therefore, initiates
the qualified beneficiary's right to elect and begins the running of
the period of that right. The Department, accordingly, believes that
the notice of right to elect continuation coverage must provide the
qualified beneficiary with the information relevant to the exercise of
the right. The following questions should be considered in light of
this concern.
A. What information should be required to be included in the notice
of the right to elect continuation coverage?
B. For example, should the notice be required to include:
1. A description of the continuation coverage that the qualified
beneficiary is entitled to elect;
2. A description of the period over which such continuation
coverage would be provided;
3. A description of the premiums that the qualified beneficiary
would be required to pay, including the manner in which such premiums
were calculated, the dates on which payment would be due, the address
to which payment should be sent, and the consequences of nonpayment;
4. An explanation of the election process, including the period of
time within which an election can be made, the consequences of electing
or failing to elect continuation coverage, and the possibility of
rescinding an election; or
5. An explanation of any rights that might arise to cause an
extension of the maximum period of continuation coverage (such as with
respect to any qualified beneficiary who is determined to be disabled
within the first 60 days of continuation coverage) and the notice
obligations imposed on any such qualified beneficiary?
C. Is there other information that should be required to be
included in the notice of right to elect continuation coverage, such as
the significance of electing continuation coverage for rights granted
by HIPAA or the FMLA?
D. Should significant information relevant to the decision whether
to elect continuation coverage be required to be provided in the
notice, or should inclusion of the information in the summary plan
description (SPD), with a reference in the notice to the relevant
information in the SPD, be deemed adequate?
E. Should the Department provide a ``model'' notice of right to
elect continuation coverage or ``model'' language on selected subjects
for use in the notice?
IV. Social Security Disability Notice
A. What, if any, problems have covered employees, qualified
beneficiaries, employers, or plan administrators encountered in
obtaining the 11-month extension or in administering the provisions
granting the right to the 11-month extension, particularly with respect
to satisfying the notice requirements imposed by sections 602(2)(v) and
606(3)?
[[Page 49898]]
V. Other Issues
A. What are the practical and appropriate means (e.g., written
notices, electronic media, and/or oral interviews) through which the
COBRA notice requirements should be satisfied?
B. What kinds of procedures should or may plan administrators
establish to permit qualified beneficiaries to establish their
entitlement to extensions of the period of continuation coverage, such
as through the occurrence of second qualifying events or as a result of
disability determinations?
C. What administrative procedures have plan administrators adopted
to provide additional notices or information not expressly mandated in
the COBRA provisions, but necessary or useful in the orderly
implementation of continuation coverage requirements, such as to
explain changes in the coverage provided under the group health plan
(including changes in the issuer or service provider), to make
available open enrollment or election periods provided under the plan,
to enforce due dates for continuation coverage premiums, or to
implement the termination of continuation coverage and make available
any conversion options provided under the plan?
All submitted comments will be made part of the record of the
preceding referred to herein and will be available for public
inspection.
Signed at Washington, DC, this 17th day of September, 1997.
Olena Berg,
Assistant Secretary for Pension and Welfare Benefits, U.S. Department
of Labor.
[FR Doc. 97-25240 Filed 9-22-97; 8:45 am]
BILLING CODE 4510-29-P