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Under
ERISA, the summary plan description (SPD) is the primary vehicle for informing
plan participants and beneficiaries about their rights and benefits under the
employee benefit plans in which they participate. The Department of Labor (DOL)
governs the content of SPD's, including participants' COBRA
rights.
Under final
regulations adopted November 21, 2000, the following COBRA-related provisions
are required to be included in SPDs:
NOTE: These rules require SPDs to be
updated by the first day of the second plan year beginning on or after Jan. 20,
2001. If you have a calendar-year plan, your SPDs will need to be revised by
Jan 1, 2003.
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Because
COBRA provisions confer important substantive rights on participants and
beneficiaries, information concerning these rights must be provided in the SPD
and not in a separate document.
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A plan
administrator must distribute the SPD within 90 days of an individual's
becoming a plan participant or beneficiary under the plan. COBRA disclosure
requirements are satisfied if the covered employee and spouse are provided with
the SPD, which includes COBRA continuation coverage information at the time
coverage commences under the plan.
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When the
spouse's last known address is the same as the covered employees, a single
mailing of the SPD with COBRA information addressed to both the employee and
the spouse constitutes good faith compliance with the COBRA notification
requirement. However, in-hand delivery of the SPD to the employee at the work
site would not constitute adequate notice of COBRA information to the
spouse.
(Federal
Register Vol. 65, No. 225, Nov 21, 2000) |
