QUESTION: To manage COBRA as economically as attainable, we don’t ship payments for COBRA premiums or present reminders when COBRA premiums are late. If certified beneficiaries don’t pay their month-to-month COBRA premium by the top of the grace interval, we don’t contact them—we merely lower off COBRA protection retroactive to the start of the month. Does this adjust to COBRA?

ANSWER: Whereas COBRA doesn’t require plans to ship payments or premium cost reminders, there are circumstances through which written communications will likely be required. Most notably, plan directors should present a written discover of termination if a certified beneficiary’s COBRA protection terminates earlier than the top of the utmost protection interval. (As a reminder, the COBRA most protection interval is mostly 18 or 36 months, relying on the qualifying occasion that triggered the COBRA election.) COBRA could also be terminated earlier than the top of the utmost protection interval for sure causes specified within the COBRA statute, together with a failure to well timed pay premiums.

When COBRA is terminated early, every affected certified beneficiary should obtain a discover “written in a way calculated to be understood by the typical plan participant” that states (1) the explanation why COBRA protection has terminated early; (2) the protection termination date; and (3) any rights the certified beneficiary might have underneath the plan or relevant regulation to elect different group or particular person protection. Typically, this discover of termination should be furnished “as quickly as practicable” following a call to terminate COBRA protection. Provision of the discover upfront of protection termination just isn’t essentially required, but when the plan administrator is ready to take action underneath the “as quickly as practicable” commonplace, it should. A single discover could also be supplied to a lined worker and the worker’s lined partner (in the event that they reside on the similar tackle) by addressing the discover to them each. And a discover to the lined worker or partner satisfies the requirement with respect to a dependent little one who lives with the one that obtained the discover. Then again, if any of the certified beneficiaries reside at completely different addresses and that reality is thought to the plan administrator primarily based on “the latest data obtainable to the plan,” then separate notices should be supplied. Like different COBRA-required notices, a discover of termination should be furnished utilizing “measures fairly calculated to make sure precise receipt of the fabric.” Whereas DOL-approved strategies embrace mail, hand-delivery, and digital transmission, we suggest utilizing first-class mail.

For extra data, see EBIA’s COBRA guide at Sections XXII.D (“Dealing With Overdue Premiums”) and XXIII (“Discover of Termination of COBRA Protection”), and EBIA’s Pattern Discover of Termination of COBRA Protection.

Contributing Editors: EBIA Workers.