Every year, the American Bar Association’s Joint Committee on Employee Benefits (JCEB) establishes a meeting with Department of Labor (DOL) officials to ask for guidance on recent “gray issues” involved when administering employee benefits. The 2005 meeting addressed two COBRA-related issues; the Disability Extension and Multiple Qualifying Events.
The question proposed to the DOL was, “Could the eleven-month disability extension be denied to an individual if they did not provide Social Security Administration’s determination within the initial eighteen months IF the individual was never notified of this requirement?”
Before we address the question and how the DOL answered it, you need to have a complete understanding of the requirements to offer the COBRA Disability extension. Before offering the Disability Extension you should review your records to see if the following transpired.
1) Was the individual disabled on or before their 60th day on COBRA? Individuals enrolled on COBRA who become disabled after the 60th day are not eligible for the eleven month extension.
2) Was the qualifying event experienced either Termination of Employment or Reduction in Work Hours? The eleven month extension is only available to individuals who experienced a Termination or Reduction in work hours (and who have not experienced a secondary qualifying event).
3) Did the individual provide the Administrator with the Social Security Administration’s Disability Determination within the eighteen months under COBRA? To receive the extension, disabled individuals must provide the Administrator the Disability Determination from the SSA.
4) Did the individual receive the General Notice within the required ninety days from the insurance plan eligibility date? Administrators sometimes forget the importance of the General Notice and how it can “haunt” them if it is not provided as required by law. The notice states what the responsibilities are of the individual if/when they experience specific events.
If the answers to all these questions are “yes,” then the individual (as well as any enrolled family members) should be offered the eleven month extension. The question the JCEB requested guidance on deals with question #4 above. If the Administer did not provide (or could not prove they provided) the General Notice, would they have to offer the “disabled” individual the eleven-month extension without the SSA Disability Determination? An interesting issue that should not occur provided the General Notice is distributed per COBRA’s final regulation’s requirement.
The DOL stated that the plan must notify the individuals of the SSA Disability Determination notice requirement (to be provided to the Plan Administrator within the initial eighteen months under COBRA) before the plan may enforce its right not to offer the extension. This is what we would have expected and it just strengthens our position on how Administrators should be able to offer proof that the General Notice was sent in accordance with the law.
In regards to a multiple qualifying event, it was agreed the law states that dependents may be eligible for up to thirty-six months of COBRA coverage if they experience either a divorce, employee’s death or no longer meet the requirements of a “dependent” under the group plan. If this occurs, the plan may require qualified beneficiaries to notify the Plan Administrator within sixty-days after the later of:
1) the date of the qualifying event;
2) the date that the plan coverage is lost due to the qualifying event; and
3) the date on which the qualified beneficiary is informed of both the responsibility to provide the qualifying event notice and the plan’s procedures for doing so.
The JCEB ask DOL officials if the second condition (the date that the plan coverage is lost due to the qualifying event) was relevant because a qualified beneficiary on COBRA has already lost standard coverage due to the initial qualifying event and current COBRA coverage cannot be terminated due to the secondary qualifying event. The DOL agreed that the date was irrelevant. Although the DOL officials provided guidance, they also stated that their answers were “unofficial, nonbonding” answers.
COBRA Solutions - Staff
The question proposed to the DOL was, “Could the eleven-month disability extension be denied to an individual if they did not provide Social Security Administration’s determination within the initial eighteen months IF the individual was never notified of this requirement?”
Before we address the question and how the DOL answered it, you need to have a complete understanding of the requirements to offer the COBRA Disability extension. Before offering the Disability Extension you should review your records to see if the following transpired.
1) Was the individual disabled on or before their 60th day on COBRA? Individuals enrolled on COBRA who become disabled after the 60th day are not eligible for the eleven month extension.
2) Was the qualifying event experienced either Termination of Employment or Reduction in Work Hours? The eleven month extension is only available to individuals who experienced a Termination or Reduction in work hours (and who have not experienced a secondary qualifying event).
3) Did the individual provide the Administrator with the Social Security Administration’s Disability Determination within the eighteen months under COBRA? To receive the extension, disabled individuals must provide the Administrator the Disability Determination from the SSA.
4) Did the individual receive the General Notice within the required ninety days from the insurance plan eligibility date? Administrators sometimes forget the importance of the General Notice and how it can “haunt” them if it is not provided as required by law. The notice states what the responsibilities are of the individual if/when they experience specific events.
If the answers to all these questions are “yes,” then the individual (as well as any enrolled family members) should be offered the eleven month extension. The question the JCEB requested guidance on deals with question #4 above. If the Administer did not provide (or could not prove they provided) the General Notice, would they have to offer the “disabled” individual the eleven-month extension without the SSA Disability Determination? An interesting issue that should not occur provided the General Notice is distributed per COBRA’s final regulation’s requirement.
The DOL stated that the plan must notify the individuals of the SSA Disability Determination notice requirement (to be provided to the Plan Administrator within the initial eighteen months under COBRA) before the plan may enforce its right not to offer the extension. This is what we would have expected and it just strengthens our position on how Administrators should be able to offer proof that the General Notice was sent in accordance with the law.
In regards to a multiple qualifying event, it was agreed the law states that dependents may be eligible for up to thirty-six months of COBRA coverage if they experience either a divorce, employee’s death or no longer meet the requirements of a “dependent” under the group plan. If this occurs, the plan may require qualified beneficiaries to notify the Plan Administrator within sixty-days after the later of:
1) the date of the qualifying event;
2) the date that the plan coverage is lost due to the qualifying event; and
3) the date on which the qualified beneficiary is informed of both the responsibility to provide the qualifying event notice and the plan’s procedures for doing so.
The JCEB ask DOL officials if the second condition (the date that the plan coverage is lost due to the qualifying event) was relevant because a qualified beneficiary on COBRA has already lost standard coverage due to the initial qualifying event and current COBRA coverage cannot be terminated due to the secondary qualifying event. The DOL agreed that the date was irrelevant. Although the DOL officials provided guidance, they also stated that their answers were “unofficial, nonbonding” answers.
COBRA Solutions - Staff
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