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 September 26, 2003 DOL PUSHES
BACK DEADLINE FOR COMPLYING WITH
In a news release issued on September 17, 2003, the U.S. Department of Labor (DOL)
announced that it plans to give group health plans six months after the adoption of
final rules for the notification requirements of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA) in which to implement the requirements. In the
news release, the DOL stated that it expects to issue final rules in early 2004.
(To see the DOL news release, click
here.) Brief Background: The Proposed Rules and Reaction to Them On May 28, 2003, the DOL released proposed COBRA Notice Rules. Included in the
proposed rules were requirements for certain plan disclosures regarding COBRA,
as well as a proposed model COBRA General Notice and a proposed model Election
Notice. For a summary of the proposed rules, see
The Segal Company's July 2003 Bulletin, "DOL Issues Proposed Rules for Six COBRA Notices".
The proposed regulations indicated that compliance would be required as of
January 1, 2004, a time frame that concerned plan sponsors because they would not
have had enough time to make necessary changes in forms and procedures. Several comments on the proposed rules received by the DOL are posted on its Web site.
To see those comments, click
here.
The DOL will review these comments and possibly make changes to the proposed rule
before issuing a final rule. Implications for Sponsors of Group Health Plans The new DOL announcement will now ensure that plans have six months to comply after
a final rule is issued, and that compliance will not be required for plan years
beginning January 1, 2004. The DOL also stated that between now and the effective date of final rules, plans
may use the model notices contained in the proposed rule to "satisfy their COBRA
notice obligations, although they are not required to do so." No statement was made
regarding what Summary Plan Descriptions (SPD) amendments or other changes plans
should make in the interim. Next Steps Sponsors of group health plans should discuss with their legal counsel what good-faith
compliance efforts should be made between now and the effective date of the final rules.
Plans may wish to use the proposed model forms, but should make sure they contain all
of the information listed in the regulation itself and any additional information that
the plan deems appropriate. Plans may also wish to update their SPD to include information
such as a procedure for individuals to provide information to the plan regarding certain
qualifying events and other actions as set out in the proposed rules. Multiemployer plans should note that the proposed models were drafted for single-employer
plans. They will need to be adapted for multiemployer use.
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