The 65 percent COBRA premium subsidy for involuntarily terminated workers has been extended into 2010 and expanded in scope by The Fiscal Year 2010 Defense Appropriations Act. For more information regarding the expansion, see our previous Benefits Alert (http://tinyurl.com/yzfl9p8).
As a result of this expansion, employers are required to provide an updated COBRA General (Election) Notice that explains these new COBRA rights to each qualified beneficiary who experienced any type of qualifying event from September 1, 2008 through February 28, 2010, and who did not otherwise receive a COBRA notice. In addition, employers must provide the following individuals with the new Premium Assistance Extension Notice:
- Individuals who experienced a termination of employment (whether it was voluntary or involuntary) on or after October 31, 2009, but who were not provided a notice that included information regarding the COBRA subsidy expansion, and
- Assistance eligible individuals (AEIs) who were receiving the subsidy as of October 31, 2009
The due date for delivery of the notice is February 17, 2010. Special notice requirements, however, apply to a sub-group of the AEIs who were receiving the subsidy as of October 31, 2009. Specifically, AEIs who have exhausted their nine months of COBRA subsidy but who, as a result of the expansion are once again eligible for the subsidy, are required to receive the Premium Extension Notice within 60 days of the date the COBRA subsidy expired. For example, AEIs who exhausted their COBRA subsidy as of November 30, 2009 must receive this additional notice by January 29, 2010.
The Department of Labor has posted on its website guidance regarding these notice requirements and an updated model COBRA General (Election) Notice, as well as an updated Alternative Notice. The DOL has also posted the new Premium Extension Notice. The notices and guidance are available at: www.dol.gov/ebsa/COBRAmodelnotice.html and www.dol.gov/ebsa/faqs/faq-cobra-premiumreductionEE.html.
Employers and plan administrators should start now to meet these notice obligations.
This article is presented for informational purposes only and is not intended to constitute legal advice.
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