September Question of the Month: Is my client on the hook for failure to send a COBRA notice?

Gina – Can my client (an employer) hold their TPA (not you!) legally responsible for failure to send a Qualifying Event COBRA Notice, or is the employer on the hook for it? – Broker, Tacoma, WA

Answer: Most likely, the client is on the hook because most TPAs will not agree to serve as the legal “Plan Administrator”.  In a lawsuit for failure to offer COBRA coverage, it’s whomever is named as the legal Plan Administrator who must demonstrate that a COBRA Election Notice was properly mailed – and is therefore liable for any failure to notify.  Even if the employer uses a third-party COBRA Administrator, the employer must provide sufficient oversight to ensure notices are printed and mailed within the required time period with evidence of the TPA’s mailing procedures.  Thus, the employer, as legal Plan Administrator, remains liable for any notice failures.

To mitigate an employer’s liability, a TPA should (and SBA does) provide your client a report which includes date of mailing, names of employees and dependents, benefits offered, and an election deadline. Such a detailed report satisfies the employer’s responsibility for sufficient oversight. Here’s a sample.

The DOL provides a guide to an employer’s responsibility for COBRA notifications.  As always, please feel free to contact me with any COBRA questions.

– Gina 



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