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CCH® PENSION AND BENEFITS — 04/02/09

DOL issues model COBRA notices required under ARRA

The Department of Labor has issued model COBRA notices to help group health plans and employers quickly explain to former employees and their families how to take advantage of the premium subsidy as set forth in the American Recovery and Reinvestment Act of 2009 (ARRA) (P. L. 111-5). ARRA was signed into law on February 17, 2009. The notices were created to help plans and employers comply with ARRA mandates requiring plans to notify certain current and former participants and beneficiaries about the reduction in premium costs. According to Hilda L. Solis, Secretary of Labor, the "ARRA provides a 65 percent tax subsidy for the cost of health benefits, making them more affordable for the unemployed and their families."

Each notice is designed for a particular group of qualified beneficiaries and contains all of the information needed to satisfy the content requirements of ARRA's notice provisions. The notices include the following disclosures:

• A summary of ARRA's premium reduction provisions.

• A form to request the premium reduction.

• A form for plans (or issuers) that permit qualified beneficiaries to switch coverage options to use to satisfy ARRA's requirement to give notice of this option.

• A form for an individual to use to satisfy ARRA's requirement to notify the plan (or issuer) that the individual is eligible for other group health plan coverage or Medicare.

• COBRA election forms and information, as appropriate.

Four notices

The notices consist of a General Notice (full version) (www.dol.gov/ebsa/COBRAgeneralnoticefullversion.doc), General Notice (abbreviated version) (www.dol.gov/ebsa/COBRAgeneralnoticeabbreviatedversion.doc), Alternative Notice (www.dol.gov/ebsa/COBRAalternativenotice.doc), and Notice in Connection with Extended Election Periods (www.dol.gov/ebsa/COBRAextendedelectionperiodnotice.doc). The full version of the General Notice must be sent to all qualified beneficiaries who experienced any type of qualifying event from September 1, 2008 through December 31, 2009, and who either have not been provided an election notice or who were provided an election notice on or after February 17, 2009 that did not include the additional information required by ARRA. The abbreviated version of the General Notice may only be used instead of the full version for individuals who: (1) experienced a qualifying event during, on, or after September 1, 2008; (2) have already elected COBRA coverage; and (3) still have COBRA coverage.

The Alternative Notice must be provided by insurance issuers that provide group health insurance coverage that is subject to continuation coverage under state law to all qualified beneficiaries, not just covered employees, who experienced any type of qualifying event from September 1, 2008 through December 31, 2009. This model notice should be modified by issuers as necessary to conform to the relevant state law. The Notice in Connection with Extended Election Periods must be sent by plans subject to federal COBRA provisions by April 18, 2009 to any assistance eligible individual who both had a qualifying event at any time from September 1, 2008 through February 16, 2009 and did not elect COBRA continuation coverage or elected it but subsequently discontinued it.

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