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Entries in COBRA (3)


Sound Process and Good Recordkeeping Demonstrate Compliance with COBRA Notice Requirements

Earlier this year the Eleventh Circuit Court of Appeals provided a reminder of how important it is for an employer to establish and follow proper COBRA notice procedures and preserve some type of evidence that the procedures are followed.  Employers who do those things will find that their efforts are rewarded if a COBRA beneficiary claims the employer failed to comply with COBRA's notice requirements.

In DeBene v. BayCare Health System, Inc., the Eleventh Circuit upheld a summary judgment issued against Paul DeBene, a former employee of BayCare Health Systems.  Among other claims, DeBene alleged that he did not receive the required COBRA notice after terminating employment.  In ruling for BayCare the court cited BayCare’s notice procedures, evidence that those procedures were followed, and evidence that other notices sent on the same day successfully reached their intended recipients.  The court determined that such evidence was sufficient to show that BayCare met its obligations under COBRA, regardless of whether DeBene actually received the notice.

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Mid-Year Health Plan Compliance Update

Developments in the employee health plan arena have come fast and furious in the first half of 2013, and there is no lack of compliance activities to occupy the time of human resources and employee benefits professionals.  We offer this collection of key developments for employers to consider as they move into the second half of 2013.

Health Care Reform

While the federal agencies charged with implementing the Affordable Care Act have kept up the impressive pace of publishing regulations and other guidance, the most significant development in this area was the decision of the Obama administration to delay enforcement of the employer mandate.  The meaning and scope of this temporary reprieve are explained briefly below.  “Large employers” that will be subject to the employer shared responsibility mandate should use this extra time to make thoughtful preparations to comply with the mandate, and employers at or near the 50-employee threshold should use the extra time to determine whether their business plans may result in the need to comply with the mandate.  Key issues include the following:

  • Delay in enforcement of the employer mandate.  The federal government has delayed employer shared responsibility reporting obligations and penalties until 2015.  Accordingly, businesses will not be penalized in 2014 for failure to offer their full-time employees health coverage that is affordable and meets minimum value requirements.  Despite the postponement in reporting, employers are still required to provide individual requesting employees with certain information that will assist the IRS in determining whether the employee is eligible for a premium tax credit.  As further discussed below, the delayed enforcement of the employer mandate does not affect...

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Traps for the Unwary: COBRA and Retiree Medical

Employers often ask about their obligations to offer COBRA benefits to terminating employees who are eligible for retiree medical coverage, and with good reason.  The interplay between COBRA and alternative retiree coverage is complicated, and an employer faces steep penalties in the event of a mistake.  Whether COBRA coverage must be offered to a terminating employee eligible for retiree medical depends on two factors: the terms of the plan under which retirees are covered and the steps an employee must take to be covered under retiree medical.  

If retirees are covered under the same plan on the same terms and conditions (including percentage of premium paid by the employer) as active employees and are automatically enrolled in retiree coverage, then in most cases COBRA need not be offered at the time of termination.  Further...

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