Employers Cautioned about New COBRA Regulations

The U.S. Department of Labor recently issued new regulations for employers administering employee health insurance benefits under the federal COBRA legislation. Following these new regulations can help employers avoid civil penalties and potentially expensive medical liability, say attorneys with G.Neil Corp.

SUNRISE, FL (PRWEB) July 2, 2004 -- The U.S. Department of Labor recently issued new regulations for employers administering employee health insurance benefits under the federal COBRA legislation. Following these new regulations can help employers avoid civil penalties and potentially expensive medical liability, say attorneys with G.Neil Corp.

Passed by Congress in 1985, the Consolidated Omnibus Budget Reconciliation Act (COBRA) provides a health insurance coverage bridge for qualified workers moving from one job to another, and coverage for their spouses and dependent children. It has been recognized as a much-needed safety net for families in crisis.

COBRA essentially applies to private-sector organizations with 20 or more employees, and it is activated by qualifying events such as a resignation, layoff, termination or reduced hours. An employee who resigns or is let go for anything other than gross misconduct has a guaranteed right to continue receiving coverage in the former employers group health plan for up to 18 months -- at the employees expense. If the spouse and dependents were covered during the employment, their coverage also is extended.

New Rules Go into Effect January 1, 2005

The new regulations cover four aspects of COBRA administration:

•The initial COBRA notice to the employee

•The notice of a qualifying event from the employer to the plan administrator

•The responsibility of the employee or qualified beneficiaries to provide notice of a second qualifying event or disability to plan administrators, and

•The COBRA election notice provided to qualified beneficiaries

These new regulations provide employers a good opportunity to review their current practices and make sure they are in compliance before the regs take effect January 1, said Ashley Kaplan, employment law attorney and head of the G.Neil legal staff. At a minimum, you should compare your current COBRA notice with the new one in the regs to ensure that yours contains the required information.

Kaplan and the G.Neil legal experts urge employers to take these actions now:

•Revise your initial and qualifying event notices to comply with the new regulations

•Update your health plan COBRA procedures and Summary Plan Description (SPD) to comply with thereasonable procedure requirement covering qualified beneficiaries, and

•Create new notices for unavailability of coverage and early termination of coverage

To help employers meet the daunting challenge of COBRA compliance, G.Neil is introducing in August an addition to its MyBiz suite of software for small businesses. MyBiz COBRA is quick and easy to use, tracks all deadlines and even prints out the required notices and employee communications. Retail price is $149.

Based in Fort Lauderdale, Fla., privately held G.Neil Corp. offers more than 7,000 tools to manage and motivate people" to over 1 million U.S. businesses. It specializes in products such as HR forms, software, pre-employment and substance testing, workplace safety solutions, and labor law compliance posters. For further information or to request a catalog, call toll-free 1-800-999-9111 or visit www.gneil.com.

For More Information, Contact:

Ashley Kaplan, Esq.    

954-846-8899

akaplan@gneil.com

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