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COBRA/ARRA News Premium Assistance Extended December 21, 2009, President Obama signed a bill extending COBRA premium subsidy provided by the American Recovery and Reinvestment Act (ARRA). We are in the process of revising the required notices and FAQs to reflect the new law. The new law is summarized as follows: Longer Subsidy Period. The maximum COBRA premium subsidy period is extended from the original 9 months to 15 months. New Eligibility Cutoff Date. The cutoff date for employees to be involuntarily terminated and still qualify for the premium subsidy has been pushed back two months—from December 31, 2009, to February 28, 2010. In addition, the law expressly provides that the subsidy will be available so long as the employee is involuntarily terminated on or before February 28, 2010, even if the employee remains covered under the employer's group health plan through the end of February, and does not actually become eligible for COBRA coverage until March 1 or later. This clause overrides the prior eligibility position of the Department of Labor. Restoration of Coverage. Assistance-eligible individuals who lost coverage upon failing to pay the full COBRA premium after the nine months of subsidized coverage expired have a second chance to pay the premium (at the 35 percent subsidized rate) so as to retroactively restore their coverage under the plan. The employee must be allowed a period of at least 60 days of the date of enactment of the law within which to pay the premium, or if later, within 30 days after the notice of restoration right is provided (see below). An employee who exhausted the nine months of subsidized coverage but retained coverage under the plan by paying the full COBRA premium must receive a refund or a credit towards future COBRA premiums for the overpayment. Required Notices. An assistance-eligible individual whose employment terminated on or after October 31, 2009, and on or before February 28, 2010, must be furnished a notice advising of the extended subsidy eligibility period. The notice must be provided within 60 days of the date of the enactment of the new law, or if later, as of the date the normal COBRA Election Notice is otherwise required to be provided to the employee. Assistance-eligible individuals who either lost COBRA coverage by failing to pay the full premium after the end of the original subsidy period, or who continued coverage by paying the full COBRA premium rate, must also be provided with a notice regarding the restoration of coverage, and an outline of the premium overpayment rules discussed above. The notice must be provided within the 60-day post-enactment period. Note: The law does not make mention of any model notice to be provided by the Department of Labor. No Affect on State Law. The extension of the premium subsidy period applies only to group health plans that are subject to federal COBRA rules (i.e., a plan maintained by an employer that normally employs 20 or more employees during a year). Plans of small employers that are governed solely by state insurance laws are not affected by this subsidy extension. Need more information? Please view the following documents: Sample COBRA notification notifying Assistance Eligible COBRA continuants of their new rights (mailed January 26, 2010) Employer Bulletin issued January 12, 2010 — provides an overview of the COBRA provisions of this law, along with information on what we're doing to comply, and what you'll need to do FAQ: COBRA Provisions of the ARRA (updated January 12, 2010) — An extensive Q&A guide to the stimulus bill's healthcare provisions and what it means for employers and members eligible for COBRA (federal) continuation Previous Bulletins Employer Bulletin issued March 3, 2009 Employer Bulletin issued April 24, 2009 Additional materials Updated COBRA Notification form (includes a check box for involuntary termination). Please use this new form going forward. Sample notice, based on U.S. Department of Labor's model notice, which we used to notify COBRA-eligible individuals of the premium subsidy. Direct payment authorization (EFT) form Sample of our new Subsidy Report For information on setting up an ACH/wire transfer, please contact our COBRA Department. If you have questions or concerns, please feel free to contact our COBRA Customer Service Team by e-mail at COBRA@ManleyServ.com or by phone at (800) 422-7038. Online Resources from the U.S. Department of Labor The Department of Labor's Employee Benefits Security Administration has posted new information on the COBRA page (www.dol.gov/COBRA), adding an updated fact sheet, FAQS for employees, and posters and flyers updated for the provisions extending the ARRA premium reduction in the Department of Defense Appropriations Act, 2010. Updated Fact Sheet: FAQs for Employees: The Job Loss Poster: Flier for Employees: Flier for Employers: Flyer for Employees on the Application for Review:
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