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COBRA SUBSIDY
To all of our Benefits and Business Lines Clients:
The Stimulus Bill signed by President Obama on February 17 will have an immediate impact on you.
Do not make the mistake of thinking this bill does not apply to you if you have less than 20 employees! The broad definition of COBRA in this bill has been extended to include State Continuation. Therefore, if you have a group health plan with as few as two members for your employees in the State of Texas, this bill affects you now.
Overview
Questions regarding current eligibility for the COBRA premium reduction
The United States Department of Labor Employee Benefits Security Administration has recently updated its COBRA page in response to a large number of questions regarding eligibility for the COBRA premium reduction under current law. In order for an involuntarily terminated employee to qualify for ARRA premium assistance, they must have been terminated no later than February 28, 2010 AND become eligible for COBRA no later than February 28, 2010 to receive the full 15 months of ARRA premium assistance.
COBRA General Notice Full Version
Plans subject to the Federal COBRA provisions must send the 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. This full version includes information on the premium reduction as well as information required in a COBRA election notice.
COBRA General Notice Abbreviated Version
The abbreviated version of the General Notice includes the same information as the full version regarding the availability of the premium reduction and other rights under ARRA, but does not include the COBRA coverage election information. It may be sent in lieu of the full version to individuals who experienced a qualifying event during on or after September 1, 2008, have already elected COBRA coverage, and still have it.
COBRA Alternative Notice
Insurance issuers that provide group health insurance coverage must send the 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 Alternative Notice or the abbreviated model General Notice appropriate for use in certain situations.
COBRA Extended Election Period Notice
Plans subject to the Federal COBRA provisions must send the Notice in Connection with Extended Election Periods to any assistance eligible individual (or any individual who would be an assistance eligible individual if a COBRA continuation election were in effect) who:
1. Had a qualifying event at any time from September 1, 2008 through February 16, 2009; and
2. Either did not elect COBRA continuation coverage, or who elected it but subsequently discontinued COBRA.
This notice includes information on ARRA’s additional election opportunity, as well as premium reduction information. This notice must be provided by April 18, 2009.
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