• The Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, is a federal law that protects some employees who leave their jobs and wish to remain covered by the employer's health insurance plan. COBRA made important changes to the Employee Retirement Income Security Act (ERISA). Of the myriad federal employment regulations and laws employers must comply with, COBRA is frequently cited as one of the most complex and confusing. Complying with COBRA requires maintaining several categories of documents related to COBRA notices and health insurance information.
  
  

COBRA Notification Requirements

• COBRA requires employers to notify employees and their dependents of their rights under COBRA, specifically rights regarding the continuation of health insurance benefits. Employers must give notice both when an employee begins participation in the employer's plan and when an event causes the employee to lose coverage under the employer's plan. The notice to an employee who is losing coverage must include the name of an insurance provider under which coverage can be continued and contact information for an individual who can provide further information on the continuation plan. Additionally, the notice must include general information about the new plan.
  
  

Recommended Record Retention

• Several categories of documents should be retained to ensure compliance with COBRA. Additionally, while some of these documents are not necessarily required by an explicit provision of COBRA, it is important to keep them to document compliance in the event of government or employee complaints or litigation. Specifically, keep copies of all notifications required by COBRA. Keep verifiable signed documents that acknowledge an employee received COBRA-required notices. Furthermore, if employee gross misconduct justifies the denial of benefits, document events surrounding such misconduct and keep them.
  
  

Retention Period

• Regulations under COBRA do not offer any explicit guidance for the length of time records must be kept. Under ERISA, it was generally accepted that records should be maintained for six years from the date of their creation. Because COBRA amended many aspects of ERISA and is essentially an expansion of ERISA, it is broadly accepted that records created pursuant to COBRA should be maintained for the same six-year period as records retained in accordance with ERISA mandates.