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March 19, 2010
New COBRA Notices Published

The Department of Labor has published model notices to help employers comply with new notice requirements because of an extension and other changes to the COBRA subsidy program.

The American Recovery and Reinvestment Act of 2009 created the COBRA subsidy program. The program was originally supposed to end at the end of 2009, but Congress has approved two extensions. As amended, ARRA allows workers who are involuntarily terminated between September 1, 2008 and March 31, 2010 to be eligible for 65 percent COBRA subsidies. The workers can receive up to 15 months of subsidies.

This week, the Department of Labor updated model COBRA notices to reflect the latest extension:

  • The Updated General Notice, which must be provided to all qualified beneficiaries (not just covered employees) who experienced a qualifying event at any time from September 1, 2008 through March 31, 2010, regardless of the type of qualifying event, and who have not yet been provided an election notice.
  • Notice of New Election Period, which should be provided within 60 days of the date of the termination of employment to all individuals who:
    • Experienced a qualifying event that was a reduction in hours at any time from September 1, 2008 through March 31, 2010;
    • Subsequently experience a termination of employment at any point from March 2, 2010 through March 31, 2010; and
    • Either did not elect continuation coverage when it was first offered OR elected but subsequently discontinued the coverage.

      Individuals who experience an involuntary termination of employment after experiencing a qualifying event that consists of a reduction of hours must be provided this notice within 60 days of the termination of employment.

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  • Notice of Extended Election Period, which must be provided, before the end of the required time period for providing a COBRA election notice, to all individuals who experienced a qualifying event that was a termination of employment at some time on or after March 1, 2010; were provided notice that did not inform them of their rights under ARRA, as amended by TEA; and either chose not to elect COBRA continuation coverage at that time OR elected COBRA but subsequently discontinued that coverage.
  • Updated Alternative Notice , which must be provided by insurance issuers that offer group health insurance coverage that is subject to comparable continuation coverage requirements imposed by state law. The notice must be provided to all qualified beneficiaries, not just covered employees, who have experienced a qualifying event through March 31, 2010. It should be further modified to reflect the requirements of the applicable state law.

The department also created a new notice as a result of the extension.

  • Supplemental Information Notice , which should be provided to all individuals who elected and maintained continuation coverage based on the following qualifying events: Terminations of employment that occurred at some time on or after March 1, 2010 for which notice of the availability of the premium reduction available under ARRA was not given; or reductions of hours that occurred during the period from September 1, 2008 through March 31, 2010, which were followed by a termination of the employee's employment that occurred on or after March 2, 2010 and by March 31, 2010.

    Individuals who experience an involuntary termination of employment after experiencing a qualifying event that consists of a reduction of hours must be provided this notice within 60 days of that termination. Individuals with qualifying events that occurred on or after March 1, 2010 for which notice of the availability of the premium reduction available under ARRA was not given must be provided this notice before the end of the required time period for providing a COBRA election notice.

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