04-13949. Health Care Continuation Coverage, Correction

AGENCY:

Employee Benefits Security Administration, Labor.

ACTION:

Final rule, technical corrections.

SUMMARY:

The Department published in the Federal Register of May 26, 2004, (69 FR 30084) final rules implementing the notice requirements of the health care continuation coverage (COBRA) provisions of part 6 of title I of the Employee Retirement Income Security Act of 1974 (ERISA or the Act). This document makes technical corrections to one of the final rules and to a model notice published in an appendix to one of the final rules.

DATES:

Effective date: The regulations that are being corrected are effective on July 26, 2004, and these corrections are effective July 26, 2004.

Applicability date: The regulations that are being corrected apply to notice obligations arising under the COBRA provisions of part 6 of title I of ERISA on or after the first day of the first plan year beginning on or after the date that is six months after May 26, 2004.

FOR FURTHER INFORMATION CONTACT:

Lisa M. Alexander or Suzanne M. Adelman, Office of Regulations and Interpretations, Employee Benefits Security Administration, [phone]. this is not a toll-free number.

SUPPLEMENTARY INFORMATION:

On May 26, 2004, the Department of Labor published final regulations on the notice provisions of part 6 of title I of ERISA. The regulations comprise four sections. Section 2590.606-1 establishes the time frames within which the general notice of continuation coverage must be provided and describes the specific information that the general notice must contain. Paragraph (d) of § 2590.606-1 permits delivery of a single notice addressed to a covered employee and the covered employee's spouse at their joint residence, provided that the plan's latest information indicates that both reside at that address. paragraph (d) states, on page 30097, that “nothing in this section shall be construed to create a requirement to provide a separate notice to dependent children who share a residence with a covered employer or a covered employee's spouse to whom notice is provided in accordance with this section.” The term “covered employer” in this sentence is an inadvertent error and should instead be “covered employee.”

In an appendix to § 2590.606-4, the Department also published a Model COBRA Continuation Coverage Election Notice for use by single-employer group health plans. The section of the model notice entitled “Important Information About Your COBRA Continuation Coverage Rights” states, on page 30108, that continuation coverage will be terminated before the end of the maximum period if, among other things, “a covered employee becomes entitled to Medicare benefits (under part A, Part B, or both) after electing continuation coverage.” The term “covered employee” on this page is an inadvertent error and should be changed “qualified beneficiary.”

This correction replaces two phrases with the correct terminology to prevent confusion and improve the clarity of the regulation and model notice.

Accordingly, in the Health Care Continuation Coverage Final Rule, FR Doc. 04-11796, published in the Federal Register on May 26, 2004, on pages 30084-112, make the following corrections:

§ 2590.606-1

[Corrected]

1. On page 30097, in the third column, in paragraph (d), which is entitled Single notice rule, in the last sentence, remove the words “covered employer” and add in their place the words “covered employee.”

Appendix to § 2590.606-4 [Corrected]

2. On page 30108, in the appendix to § 2590.606-4, the page titled “Important Information About Your COBRA Continuation Coverage Rights” is revised to read as follows:

Signed at Washington, DC, this 15th day of June, 2004.

Ann L. Combs,

Assistant Secretary, Employee Benefits Security Administration, Department of Labor.