The federal COBRA law requires certain employers to offer a continuation of group health coverage to employees who are losing their jobs, either through termination by the employer, a layoff or a resignation. The law sets down a notice period, within which the employer or health plan administrator must give the employee a notice of the coverage availability.
The initial notice of rights and benefits in the health plan is required within 90 days of the employee’s coverage. If there are changes to the plan, the employer must give notice within 210 days after the year in which the changes take place. If benefits or coverage are being reduced, the notice period is 60 days.
Notice of the employer to the insurance company is required within 30 days after a qualifying event takes place. This may include termination or death of the employee. If hours are reduced to the point where health coverage is no longer available, under the terms of the plan, another qualifying event has occurred. Eligibility for Medicare on the part of the employee also requires notice to the insurance company.
The administrator of the health plan must provide the employee a notice of eligibility for continued coverage within 14 days of the date the insurance company was notified of the qualifying event. If the employee elects continuation but is not qualified, the plan has 14 days to notify the employee of that fact. The required notice to the employee must include information regarding the plan, the beneficiaries, the date insurance coverage will cease or has ceased, and the coverage available on a continuing basis. The notice also gives the cost of the continuing insurance to the terminated employee. After receiving the notice, the employee has 60 days within which to elect continuation coverage.
Any plan that covers multiple employers may adopt its own notice periods, both for qualifying events and for election by the employee of continuation coverage. The notice periods must be uniform for all beneficiaries of the insurance coverage.