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Immediate Action Required for COBRA Compliance

07.29.2003

 
Many employers must take immediate action in response to the Department of Labor’s recently issued COBRA regulations.

Immediate Replacement of Model COBRA Notice Form Required. Employers may no longer rely on the 1986 DOL model COBRA notice to comply with their COBRA notice requirements. The DOL has issued a new model notice in its proposed regulations, and has stated that use of the old model notice no longer represents good faith compliance with the COBRA notice requirements.

Updating of Group Health Plan Summary Plan Description Required. The DOL now takes the position that group health plan summary plan descriptions must include information about the health insurance tax credit for trade-displaced workers as part of the summary plan description’s discussion about COBRA. Employers should review their health plan summary plan descriptions to verify that this information is currently included in their summary plan descriptions. If the information is not included, employers should contact their employee benefit advisors regarding issuing a summary of material modifications including this information.

Employers may also need to take other action to comply with the provisions of the proposed regulations that become effective January 1, 2004. We will issue a general summary of the proposed COBRA regulations later this year.

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