On May 26, 2004, the U.S. Department of Labor ("DOL") issued final rules specifying the required content and timing of notices required by the health care continuation provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), as amended.1 DOL issued proposed COBRA rules in May 2003 (29 C.F.R. 2590.606-1 through 2590.606-4) and requested public comments. The final rules are substantially similar to the proposed rules, with only minor revisions and clarifications.
The final rules contain model notices that plan administrators may use to satisfy their obligation to notify health plan participants of COBRA rights upon commencement of coverage ("general notice"), and upon the occurrence of a qualifying event ("election notice"). In addition, the final rules require plan administrators to notify plan participants and beneficiaries when COBRA benefits are denied, and when COBRA coverage is terminated earlier than the maximum timeframe otherwise permitted by the statute.2 Finally, the final rules require plan administrators to adopt "reasonable procedures" describing how qualified beneficiaries must provide notice to the plan (e.g., qualified beneficiaries who divorce or cease to satisfy dependent eligibility requirements).
The final rules apply to COBRA notice obligations arising on or after the first day of the first plan year beginning on or after November 26, 2004. Thus, group health plans following a calendar year – comprising the majority of plans – must comply with these final rules beginning January 1, 2005.

DOL has interpretive authority over the notice and disclosure provisions of COBRA and the Treasury Department has interpretive authority over substantive COBRA rules (See Treas. Reg. § 54.4980B).

Failure to satisfy requirements under COBRA, including these notice requirements, can lead to the following adverse consequences:

1. Excise tax (the basic tax is $100 per day per qualified individual, not more than $200 per family, subject to maximum and minimum limitations) (I.R.C. § 4980B(b)(2));
2. ERISA $110 per day statutory penalties for failure to provide required notices (ERISA §§ 502(a)(1)(A), 502(c)(1)(A)); and
3. lawsuits to compel coverage (which can create liability for attorneys fees as well) (ERISA § 502(a)(1)(B)).