COBRA allows eligible individuals to continue employer-provided group health coverage for a specified period due to certain qualifying events, such as job loss. In February 2009, the American Recovery and Reinvestment Act of 2009 (ARRA) was enacted and provided a temporary 65% COBRA (or similar state continuation coverage) premium subsidy for eligible individuals. In December 2009, President Obama signed the Department of Defense Appropriations Act (2010 DOD Act or DDAA), which also amended ARRA.
The law extends the eligibility period, includes a retroactive subsidy extension, and imposes new notice requirements. The notice requirements are necessary so that all eligible employees know and understand the options that are available to them under the 2010 DOD Act. You can also get tax credits for individuals who may not have been previously eligible.
To learn more and get a list of action items that you can use right now, be sure to read the featured article by the HR pros at MyHRSupportCenter, COBRA-ARRA Subsidy Extension and New Requirements. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.
The US Department of Labor (DOL) has released updated COBRA model notices to help employers meet the notification requirements created by the passage of the Department of Defense Appropriation Act, 2010 (2010 DOD Act). The notices are the Updated General Notice, the Premium Assistance Extension Notice, and the Updated Alternative Notice.
Plans subject to the Federal COBRA provisions must provide the Updated General Notice to all qualified beneficiaries (not just covered employees) who experienced a qualifying event at any time from September 1, 2008 through February 28, 2010, regardless of the type of qualifying event, and who have not yet been provided an election notice. This model notice includes updated information on the premium reduction as well as information required in a COBRA election notice.
Plan administrators must provide notice to certain individuals who have already been provided a COBRA election notice that did not include information regarding the American Recovery and Reinvestment Act of 2009 (ARRA), as amended. This model Premium Assistance Extension Notice includes information about the changes made to the premium reduction provisions of ARRA by the 2010 DOD Act. Listed below are the affected individuals and the associated timing requirements.
- Individuals who were “assistance eligible individuals” as of October 31, 2009 (unless they are in a transition period – see below), and individuals who experienced a termination of employment on or after October 31, 2009 and lost health coverage (unless they were already provided a timely, Updated General Notice) must be provided notice of the changes made to the premium reduction provisions of ARRA by the 2010 DOD Act by February 17, 2010;
- Individuals who are in a “transition period” must be provided this notice within 60 days of the first day of the transition period. An individual’s “transition period” is the period that begins immediately after the end of the maximum number of months (generally nine) of premium reduction available under ARRA prior to its amendment. An individual is in a transition period only if the premium reduction provisions would continue to apply due to the extension from nine to 15 months and they otherwise remain eligible for the premium reduction.
Insurance issuers that provide group health insurance coverage must send the Updated Alternative Notice to persons who became eligible for continuation coverage under a State law. Continuation coverage requirements vary among States and issuers should modify this model notice as necessary to conform it to the applicable State law. Issuers may also find the model Premium Assistance Extension Notice or the Updated General Notice appropriate for use in certain situations.
Vision Payroll recommends employers consult with their benefit broker, COBRA administrator, and labor law attorney to ensure compliance with the updated notice requirements.