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COVID-19’s Impact on COBRA

Introduction

The Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) provides workers and their families with continued group health benefits for a limited period after the worker loses benefits due to a qualifying event. These circumstances include but are not limited to voluntary or involuntary job loss, reduction in hours worked, transition between jobs, death, divorce, and other life events.

COBRA generally covers employees who have worked for an employer that employed 20 or more employees during the previous year. Although employees have to elect continued coverage, employers must inform employees of this right. One manner in which employers may inform employees of their rights is by posting notices in the workplace. The United States Department of Labor (“DOL”) has provided a model notice for employers to use.

In light of the numerous layoffs and furloughs related to COVID-19, employers must ensure they notify employees of their right to continued coverage. Additionally, the DOL recently adjusted some of the deadlines and rules related to COBRA elections and payments.

What notices does COBRA require?

Employers must provide employees, who are covered by a group health plan, with a Summary Plan Description (“SPD”) and must do so within a certain time following the employee’s enrollment in the plan. The SPD must include important information about the plan, including what benefits are available and how the plan works. Upon the occurrence of a qualifying event, and depending on the type thereof, either the employer or employee must provide notice of the qualifying event to the group health plan administrator. After the qualifying event is reported, the plan administrator must then provide the employee with an election notice describing the right to continued coverage and instructions on how to make the election.

Notably, the DOL recently extended the deadlines in which notices must be provided, including when an employer has to provide its employees with election notices.

What do the notices require?

The DOL has provided model notices for both general and election notices. Due to COVID-19, the DOL also issued updated model notices for both notice requirements. While the notices do not explicitly discuss situations related to COVID-19, the DOL encourages employers to make sure that they abide by all notice requirements during these times.

The general notice requires that an employer explain what the plan covers, when the coverage is available, and how the coverage is provided. Similarly, the election notice requires an employer to inform the employee of the reason for continued coverage, who is qualified for continued coverage, how much the continued coverage costs, as well as other alternatives and factors to consider when choosing continued coverage plans.

If you feel your employment rights have been violated, or if you have any questions regarding your employment rights, please contact the experienced Birmingham employment law attorneys at Wrady Michel & King. You can contact us online or by calling us at (205) 319-9724.