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Anderson Quoted in BizNewOrleans on COBRA Changes Effective January 1, 2005
December 29, 2004

On December 17, labor relations and employment law partner, Jennifer Anderson, was quoted in the article "Employers Face January 1 Deadline on Benefits Law," which appeared on the BizNewOrleans news wire. According to the article, on January 1, employers will have to comply with changes to COBRA, a 1986 law that allows employees and their dependents to continue their group health insurance if they suddenly lose their regular coverage. Anderson was quoted as saying, "Many of the changes to the law are procedural, such as new forms, and some of the changes don't seem like much on the surface." The article cautioned, however, that according to Anderson and other advisors, "if an employee files a lawsuit over COBRA, it's the details that matter."  The article noted that in addition to potential lawsuits, the Department of Labor can assess fines of up to $110 a day for noncompliance and that the IRS may also levy fines. The article pointed out several of the changes employers need to be aware of:

  • The employer must use two different forms when they notify employees about COBRA when starting work, and after a “qualifying event” occurs.
  • Employers must establish “reasonable” procedures for individuals to provide notice of “qualifying events” and disability status. For example, the employer must put in writing a procedure for employees to notify them about a divorce, which changes the spouse’s health care eligibility. Under COBRA, spouses can be covered up to 36 months after the divorce.
  • The content of providing notice to employees and their dependents has changed. For example, if an employee marries after he is hired, the employer must give a separate notice to the new spouse about COBRA benefits. 

Anderson further commented, "While the regulations are a step forward in helping employers and plan administrators determine their COBRA obligations and rights, they'll likely still need assistance from their benefits specialists and legal counselors to stay ahead of the game."

Remember that these legal principles may change and vary widely in their application to specific factual circumstances. You should consult with counsel about your individual circumstances.