A: An initial notice must be furnished to covered employees and spouses, at the time coverage under the plan starts, informing them of their rights under COBRA and describing provisions of the law. The plan's summary plan description ("SPD") must also contain COBRA information.
When the plan administrator is notified that a qualifying event has happened, it must in turn notify each qualified beneficiary of the right to choose continuation coverage.
COBRA allows at least 60 days from the date the election notice is provided to inform the plan administrator that the qualified beneficiary wants to elect continuation coverage.
Under COBRA, the covered employee or a family member has the responsibility to inform the plan administrator of a divorce, legal separation, disability or a child losing dependent status under the plan.
Employers have a responsibility to notify the plan administrator of the employee's death, termination of employment, reduction in hours or Medicare entitlement.
If covered individuals change their martial status, or their spouses have changed addresses, they should notify the plan administrator.
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Q: What about premiums and payments? How are these handled?
A: Qualified individuals may be required to pay the entire premium for coverage up to 102% of the cost to the plan. Premiums may be higher for persons exercising the disability provisions of COBRA. Failure to make timely payments may result in loss of coverage.
Premiums may be increased by the plan, although premiums generally must be set in advance of each 12-month premium cycle.
Individuals with COBRA coverage may be responsible for paying all costs related to deductibles, and may be restricted by catastrophic and other benefit limits.
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Information provided by the Department of Labor.
