November 7, 2016

COBRA Communication Critical (article)

A recent Information Letter issued by the Internal Revenue Service, who jointly enforces COBRA with the Department of Labor, underscores the importance of COBRA communications.  Specifically, the Information Letter addressed the timing of providing the SSA’s disability determination letter to the plan administrator.  In this instance, the individual was denied the disability extension because the SSA determination letter was not provided within the plan’s stated timeframe for providing the SSA determination letter, which required the determination letter to be provided within 60 days of the reward. 

As background, the COBRA law requires continuation of group health coverage for covered employees and their dependents, known as qualified beneficiaries, who would otherwise lose coverage under a plan upon certain events.  COBRA provides for up to 18 months of continuation coverage when a qualified beneficiary loses coverage due to termination of employment or a reduction in hours of employment.  The law also provides for an extension of continuation coverage of up to 11 months if a qualified beneficiary is determined disabled by the Social Security Administration (SSA). In order to receive the 11-month extension due to disability, the qualified beneficiary is required to notify the plan administrator of receiving the SSA’s disability determination letter on the latest of:

  • Sixty days following:
  • The receipt of the disability determination;
  • the qualifying event;
  • the loss of coverage; or
  • the receipt of the explanation of the qualified beneficiary’s notice obligation to provide the disability determination notice; and
  • Prior to the end of the 18-month continuation period.

From a plan sponsor’s perspective, the take away from this Letter is to ensure proper communication of plan procedures and deadlines, especially as it relates to the timing of notification obligations required by covered employees and their dependents seeking COBRA continuation benefits.


The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.  

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