Yikes…did you forget the spouse??

Forgetting a spouse is never a good thing but when it comes to COBRA compliance, it can have legal ramifications. Considering the legal ramifications and that it’s one of the most common COBRA compliance errors made by employers, we figured it was a worthwhile topic. 

Today, we’ll touch on the spouse side of the COBRA General Rights Notice (AKA Initial Rights Notice). This notice is sent to active employees and their spouses to inform them of their rights and responsibilities if they lose coverage due to a COBRA qualifying event.  This notice transfers the legal COBRA responsibilities from the employer to the participants, so it’s kind of a big deal.

The bad news is…

• Many employers are unaware they are legally required to notify the spouse.
• Without the spousal notification, employers leave themselves open to unending COBRA litigation liability.
• One employer who forgot to notify the spouse was required to pay the spouse’s COBRA premiums indefinitely (not just 18/36 months) and 100% of the spouse’s medical bills, for life. And she was very sick.
• Spouses can “slip through the cracks” if they join mid-year (think newlyweds or adds during open enrollment).The good news is…it’s easy to fix!

The good news is…it’s easy to fix!

• Start an internal process that ensures everyone who signs up for a COBRA eligible benefit is mailed a COBRA General Rights Notice. This can be as simple as a new hire or benefit change (add/drop) checklist or as in-depth as building a data feed from your HRIS system. Whatever works best for your office, put the process in place, and audit it a few times a year to make sure no one slips through the cracks.

• Address all notices to “Employee Name and Family”. This ensures if there is a spouse, they are legally addressed as required. This method also avoids the need for duplicate letters, extra postage and mailing expenses for spouse letters.
• Send all COBRA communications with USPS proof of mail. This process legally documents the mailing and provides proof should it ever be questioned in court. Don’t get too crazy and require a signature, that can inadvertently increase your legal liability.

If this seems daunting, we’re happy to help. Give us a call at (800) 865-4485 and let our expertise reduce your COBRA liability today.