(a) General. Pursuant to section 606(a)(1) 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, written notice to each covered employee
and spouse of the covered employee (if any) of the right to continuation
coverage provided under the plan.
(b) Timing of notice. (1) The notice required by paragraph (a) of
this section shall be furnished to each employee and each employee's
spouse, not later than the earlier of:
(i) The date that is 90 days after the date on which such
individual's coverage under the plan commences, or, if later, the date
that is 90 days after the date on which the plan first becomes subject
to the continuation coverage requirements; or
(ii) The first date on which the administrator is required, pursuant
to Sec. 2590.606-4(b), to furnish the covered employee, spouse, or
dependent child of such employee notice of a qualified beneficiary's
right to elect continuation coverage.
(2) A notice that is furnished in accordance with paragraph (b)(1)
of this section shall, for purposes of section 606(a)(1) of the Act, be
deemed to be provided at the time of commencement of coverage under the
plan.
(3) In any case in which an administrator is required to furnish a
notice to a covered employee or spouse pursuant to paragraph (b)(1)(ii)
of this section,
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the furnishing of a notice to such individual in accordance with Sec.
2590.606-4(b) shall be deemed to satisfy the requirements of this
section.
(c) Content of notice. The notice required by paragraph (a) of this
section shall be written in a manner calculated to be understood by the
average plan participant and shall contain the following information:
(1) The name of the plan under which continuation coverage is
available, and the name, address and telephone number of a party or
parties from whom additional information about the plan and continuation
coverage can be obtained;
(2) A general description of the continuation coverage under the
plan, including identification of the classes of individuals who may
become qualified beneficiaries, the types of qualifying events that may
give rise to the right to continuation coverage, the obligation of the
employer to notify the plan administrator of the occurrence of certain
qualifying events, the maximum period for which continuation coverage
may be available, when and under what circumstances continuation
coverage may be extended beyond the applicable maximum period, and the
plan's requirements applicable to the payment of premiums for
continuation coverage;
(3) An explanation of the plan's requirements regarding the
responsibility of a qualified beneficiary to notify the administrator of
a qualifying event that is a divorce, legal separation, or a child's
ceasing to be a dependent under the terms of the plan, and a description
of the plan's procedures for providing such notice;
(4) An explanation of the plan's requirements regarding the
responsibility of qualified beneficiaries who are receiving continuation
coverage to provide notice to the administrator of 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.), that a qualified
beneficiary is disabled, and a description of the plan's procedures for
providing such notice;
(5) 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
(6) 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 from the plan
administrator and in the plan's SPD.
(d) Single notice rule. A plan administrator may satisfy the
requirement to provide notice in accordance with this section 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 the spouse's coverage under the
plan commences on or after the date on which the covered employee's
coverage commences, but not later than the date on which the notice
required by this section is required to be provided to the covered
employee. Nothing in this section shall be construed to create a
requirement to provide a separate notice to dependent children who share
a residence with a covered employee or a covered employee's spouse to
whom notice is provided in accordance with this section.
(e) Notice in summary plan description. A plan administrator may
satisfy the requirement to provide notice in accordance with this
section by including the information described in paragraphs (c)(1),
(2), (3), (4), and (5) of this section in a summary plan description
meeting the requirements of Sec. 2520.102-3 of this chapter furnished
in accordance with paragraph (b) of this section.
(f) Delivery of notice. The notice required by this section shall be
furnished in a 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 this section. Use of the model notice is not
mandatory. The model notice reflects the requirements of this section
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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 (c) 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.
[69 FR 30097, May 26, 2004; 69 FR 34921, June 23, 2004] 
