March 7, 2005 |
Posted By Diane Pfadenhauer |
New York's "5 Day Letter"
Someone recently commented to me that they were in the hot seat over New York's "5 Day Letter."This letter (regulations - Section 196.5 - here) is a requirement that specifically requires employers to provide written notice to employees upon termination of employment regarding the termination of their benefit plans. Employers must...
"...notify any employee terminated from employment, in writing, of the exact date of such termination as well as the exact date of cancellation of employee benefits connected with such termination. In no case shall notice of such termination be provided more than five working days after the date of such termination..."The regulations also provide for some nasty penalties such as a $5,000 fine, AND, where there involves a failure to provide notice of the termination of a group accident or group health policy the claimant can be entitled to an award of "appropriate damages" which may include "reimbursement for medical expenses which were not covered by the policyholder's insurer by virtue of his termination..." In addition, this penalty can be doubled for egregious violation. For the details, go Sections 217 & 218 here. Most large employers satisfy this requirement by sending out a COBRA notice (as long as done within 5, not the 14 days as required by COBRA). Unfortunately smaller employers, who are not subject to COBRA's notice requirements, should make sure their paperwork is in order and be sure to send out these notices.