[Code of Federal Regulations]

[Title 29, Volume 9]

[Revised as of July 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 29CFR2590.606-4]



[Page 669-678]

 

                             TITLE 29--LABOR

 

 CHAPTER XXV--EMPLOYEE BENEFITS SECURITY ADMINISTRATION, DEPARTMENT OF 

                                  LABOR

 

PART 2590_RULES AND REGULATIONS FOR GROUP HEALTH PLANS--Table of Contents

 

Subpart A_Continuation Coverage, Qualified Medical Child Support Orders, 

                      Coverage for Adopted Children

 

Sec.  2590.606-4  Notice requirements for plan administrators.



    (a) General. Pursuant to section 606(a)(4) of the Employee 

Retirement Income Security Act of 1974, as amended (the Act), the 

administrator of a group health plan subject to the continuation 

coverage requirements of Part 6 of title I of the Act shall provide, in 

accordance with this section, notice to each qualified beneficiary of 

the qualified beneficiary's rights to continuation coverage under the 

plan.

    (b) Notice of right to elect continuation coverage. (1) Except as 

provided in paragraph (b) (2) or (3) of this section, upon receipt of a 

notice of qualifying event furnished in accordance with Sec.  2590.606-2 

or Sec.  2590.606-3, the administrator shall furnish to each qualified 

beneficiary, not later than 14 days after receipt of the notice of 

qualifying event, a notice meeting the requirements of paragraph (b)(4) 

of this section.

    (2) In the case of a plan with respect to which an employer of a 

covered employee is also the administrator of the plan, except as 

provided in paragraph (b)(3) of this section, if the employer is 

otherwise required to furnish a notice of a qualifying event to an 

administrator pursuant to Sec.  2590.606-2, the administrator shall 

furnish to each qualified beneficiary a notice meeting the requirements 

of paragraph (b)(4) of this section not later than 44 days after:

    (i) In the case of a plan that provides, with respect to the 

qualifying event, that continuation coverage and the applicable period 

for providing notice under section 606(a)(2) of the Act shall commence 

with the date of loss of coverage, the date on which a qualified 

beneficiary loses coverage under the plan due to the qualifying event; 

or

    (ii) In all other cases, the date on which the qualifying event 

occurred.

    (3) In the case of a plan that is a multiemployer plan, a notice 

meeting the requirements of paragraph (b)(4) of this section shall be 

furnished not later than the later of:

    (i) The end of the time period provided in paragraph (b)(1) of this 

section; or

    (ii) The end of the time period provided in the terms of the plan 

for such purpose.

    (4) The notice required by this paragraph (b) shall be written in a 

manner calculated to be understood by the average plan participant and 

shall contain the following information:

    (i) The name of the plan under which continuation coverage is 

available; and the name, address and telephone number of the party 

responsible under the plan for the administration of continuation 

coverage benefits;

    (ii) Identification of the qualifying event;

    (iii) Identification, by status or name, of the qualified 

beneficiaries who are recognized by the plan as being entitled to elect 

continuation coverage with respect to the qualifying event, and the date 

on which coverage under the plan will terminate (or has terminated) 

unless continuation coverage is elected;

    (iv) A statement that each individual who is a qualified beneficiary 

with respect to the qualifying event has an independent right to elect 

continuation coverage, that a covered employee or a qualified 

beneficiary who is the spouse of the covered employee (or was the spouse 

of the covered employee on the day before the qualifying event occurred) 

may elect continuation coverage on behalf of all other qualified 

beneficiaries with respect to the qualifying event, and that a parent or 

legal guardian may elect continuation coverage on behalf of a minor 

child;

    (v) An explanation of the plan's procedures for electing 

continuation coverage, including an explanation of the time period 

during which the election must be made, and the date by which the 

election must be made;

    (vi) An explanation of the consequences of failing to elect or 

waiving



[[Page 670]]



continuation coverage, including an explanation that a qualified 

beneficiary's decision whether to elect continuation coverage will 

affect the future rights of qualified beneficiaries to portability of 

group health coverage, guaranteed access to individual health coverage, 

and special enrollment under part 7 of title I of the Act, with a 

reference to where a qualified beneficiary may obtain additional 

information about such rights; and a description of the plan's 

procedures for revoking a waiver of the right to continuation coverage 

before the date by which the election must be made;

    (vii) A description of the continuation coverage that will be made 

available under the plan, if elected, including the date on which such 

coverage will commence, either by providing a description of the 

coverage or by reference to the plan's summary plan description;

    (viii) An explanation of the maximum period for which continuation 

coverage will be available under the plan, if elected; an explanation of 

the continuation coverage termination date; and an explanation of any 

events that might cause continuation coverage to be terminated earlier 

than the end of the maximum period;

    (ix) A description of the circumstances (if any) under which the 

maximum period of continuation coverage may be extended due either to 

the occurrence of a second qualifying event or a determination by the 

Social Security Administration, under title II or XVI of the Social 

Security Act (42 U.S.C. 401 et seq. or 1381 et seq.) (SSA), that the 

qualified beneficiary is disabled, and the length of any such extension;

    (x) In the case of a notice that offers continuation coverage with a 

maximum duration of less than 36 months, a description of the plan's 

requirements regarding the responsibility of qualified beneficiaries to 

provide notice of a second qualifying event and notice of a disability 

determination under the SSA, along with a description of the plan's 

procedures for providing such notices, including the times within which 

such notices must be provided and the consequences of failing to provide 

such notices. The notice shall also explain the responsibility of 

qualified beneficiaries to provide notice that a disabled qualified 

beneficiary has subsequently been determined to no longer be disabled;

    (xi) A description of the amount, if any, that each qualified 

beneficiary will be required to pay for continuation coverage;

    (xii) A description of the due dates for payments, the qualified 

beneficiaries' right to pay on a monthly basis, the grace periods for 

payment, the address to which payments should be sent, and the 

consequences of delayed payment and non-payment;

    (xiii) An explanation of the importance of keeping the administrator 

informed of the current addresses of all participants or beneficiaries 

under the plan who are or may become qualified beneficiaries; and

    (xiv) A statement that the notice does not fully describe 

continuation coverage or other rights under the plan, and that more 

complete information regarding such rights is available in the plan's 

summary plan description or from the plan administrator.

    (c) Notice of unavailability of continuation coverage. (1) In the 

event that an administrator receives a notice furnished in accordance 

with Sec.  2590.606-3 relating to a qualifying event, second qualifying 

event, or determination of disability by the Social Security 

Administration regarding a covered employee, qualified beneficiary, or 

other individual and determines that the individual is not entitled to 

continuation coverage under part 6 of title I of the Act, the 

administrator shall provide to such individual an explanation as to why 

the individual is not entitled to continuation coverage.

    (2) The notice required by this paragraph (c) shall be written in a 

manner calculated to be understood by the average plan participant and 

shall be furnished by the administrator in accordance with the time 

frame set out in paragraph (b) of this section that would apply if the 

administrator received a notice of qualifying event and determined that 

the individual was entitled to continuation coverage.

    (d) Notice of termination of continuation coverage. (1) The 

administrator of a plan that is providing continuation



[[Page 671]]



coverage to one or more qualified beneficiaries with respect to a 

qualifying event shall provide, in accordance with this paragraph (d), 

notice to each such qualified beneficiary of any termination of 

continuation coverage that takes effect earlier than the end of the 

maximum period of continuation coverage applicable to such qualifying 

event.

    (2) The notice required by this paragraph (d) shall be written in a 

manner calculated to be understood by the average plan participant and 

shall contain the following information:

    (i) The reason that continuation coverage has terminated earlier 

than the end of the maximum period of continuation coverage applicable 

to such qualifying event;

    (ii) The date of termination of continuation coverage; and

    (iii) Any rights the qualified beneficiary may have under the plan 

or under applicable law to elect an alternative group or individual 

coverage, such as a conversion right.

    (3) The notice required by this paragraph (d) shall be furnished by 

the administrator as soon as practicable following the administrator's 

determination that continuation coverage shall terminate.

    (e) Special notice rules. The notices required by paragraphs (b), 

(c), and (d) of this section shall be furnished to each qualified 

beneficiary or individual, except that:

    (1) An administrator may provide notice to a covered employee and 

the covered employee's spouse by furnishing a single notice addressed to 

both the covered employee and the covered employee's spouse, if, on the 

basis of the most recent information available to the plan, the covered 

employee's spouse resides at the same location as the covered employee; 

and

    (2) An administrator may provide notice to each qualified 

beneficiary who is the dependent child of a covered employee by 

furnishing a single notice to the covered employee or the covered 

employee's spouse, if, on the basis of the most recent information 

available to the plan, the dependent child resides at the same location 

as the individual to whom such notice is provided.

    (f) Delivery of notice. The notices required by this section shall 

be furnished in any manner consistent with the requirements of Sec.  

2520.104b-1 of this chapter, including paragraph (c) of that section 

relating to the use of electronic media.

    (g) Model notice. The appendix to this section contains a model 

notice that is intended to assist administrators in discharging the 

notice obligations of paragraph (b) of this section. Use of the model 

notice is not mandatory. The model notice reflects the requirements of 

this section as they would apply to single-employer group health plans 

and must be modified if used to provide notice with respect to other 

types of group health plans, such as multiemployer plans or plans 

established and maintained by employee organizations for their members. 

In order to use the model notice, administrators must appropriately add 

relevant information where indicated in the model notice, select among 

alternative language and supplement the model notice to reflect 

applicable plan provisions. Items of information that are not applicable 

to a particular plan may be deleted. Use of the model notice, 

appropriately modified and supplemented, will be deemed to satisfy the 

notice content requirements of paragraph (b)(4) of this section.

    (h) Applicability. This section shall apply to any notice obligation 

described in this section that arises on or after the first day of the 

first plan year beginning on or after November 26, 2004.



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[69 FR 30097, May 26, 2004; 69 FR 34921, June 23, 2004]