The Consolidated Omnibus Budget Reconciliation Act (COBRA) was passed in 1986 to provide certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. There are numerous parts of COBRA which need to be recognized.

Initial COBRA Notice – COBRA requires employers sponsoring group health plans to provide covered employees (and spouses, if covered) an initial notice describing their rights and obligations under the plan. The DOL’s COBRA regulations clarify that the initial COBRA notice should generally be furnished within 90 days after the commencement of plan coverage.

COBRA Election Notice = An employee and certain covered dependents who experience a qualifying event and a subsequent termination of coverage under the plan should receive a COBRA Election Notice, which explains their right to continue that coverage through COBRA. The notice should include the coverage termination date, information on how to continue coverage and payment information.

Notice of Unavailability of Continuation Coverage – Individuals who would normally expect to receive COBRA coverage (or an extension of COBRA coverage), but will not receive the coverage must receive a notice from the plan administrator explaining why COBRA coverage is not available. This is known as the Notice of Unavailability of Continuation Coverage.

Notice of Early Termination of COBRA = The U.S. Department of Labor (DOL) requires that plan administrators provide a written notice of the termination of COBRA coverage to each affected qualified beneficiary when COBRA coverage terminates before the end of the maximum coverage period. The reason for this is to allow the individuals affected to take appropriate next steps to protect their access to health coverage, either on a group or individual basis.

Legal action may be brought by participants or the DOL, and an ERISA fine of $110 per day per violation may be assessed by a court. This penalty can be levied per each qualified beneficiary with penalties increasing to $200 per day.