Question: What Must I Give Employees Who Are Leaving Our Company?
A “For Your Benefits” brochure published by the CA EDD outlining an employee’s rights to several state benefit programs. The most recent publication (DE2320) is dated November 2006. You may order these from our office or download the lengthy EDD DE form 2320 here.
The California Health Insurance Premium Payment (HIPP) Program also requires that employers give separating employees notice of their rights under the HIPP laws for assistance in paying medical premiums. You may download a sample HIPP Notice here.
All of the above forms and more are available to our clients at our website library. Contact us for the password. An employee or his/her dependents losing group health coverage may be eligible for COBRA continuation of coverage and must receive a COBRA Continuation Coverage Election Notice outlining all the rights under this extensive law. This Notice does not have to be delivered to the employee on the final work day. However, timing and proof of delivery are very important under this law. The employer must notify the plan administrator within 30 days of the employee’s loss of coverage. The plan administrator must send to the employee (and covered dependents) the Notice within 14 days. COBRA Notices will vary. We suggest you contact your insurance carrier first, and we can certainly advise as well.
Employers with 20 or fewer employees will be covered by Cal-COBRA and will have these notification services completed by the insurance carrier. Larger employers will have to administer this notification process internally or hire a third party to do so. Penalties for delaying this Notice are significant, ranging from $100/day for each day of non-compliance to $500,000 or 10% of the health plan costs (whichever is less) for major violations.
Employees who also have profit sharing, retirement funds, 401k, etc. should also receive notice of the options of the disbursement of these funds, although this does not have to be done by the last day of work. Each plan should have a notice period set out in the plan documents.
By the way, an employee whose employment is separated may request a W-2 prior to the normal January cycle. If requested, the W-2 must be sent for all wages paid during the current calendar year. The form must be sent within 30 days of the request or, if later, within 30 days of your last payment of wages to the employee.