Employee Benefits-DOL Issues Model COBRA Notices Reflecting Extension Of COBRA Subsidy

The recently enacted Temporary Extension Act of 2010 (“TEA”) extended the eligibility for the COBRA premium reduction subsidy for one month. Thus, an individual whose COBRA qualifying event is an involuntary termination of employment occurring on or prior to March 31, 2010 (as opposed to February 28, 2010) may qualify for the subsidy. TEA also expanded eligibility for the subsidy to individuals whose COBRA qualifying event is a reduction of hours, occurring at any time from September 1, 2008 through March 31, 2010, which is followed by an involuntary termination of employment occurring on or after March 2, 2010 through March 31, 2010. This expansion also includes a second election opportunity for these individuals who had a reduction of hours qualifying event followed by an involuntary termination, if they did not elect COBRA continuation coverage when it was first offered, or elected but subsequently discontinued COBRA coverage.

The COBRA rules, as amended by TEA, require that group health plans notify certain current and former participants and beneficiaries about the premium reduction subsidy. The Department of Labor (the “DOL”) has updated its existing models and created several additional models to help plans meet these requirements. Each model notice is designed for a particular group of individuals and contains information to help satisfy COBRA’s notice provisions, including those added by TEA. The model notices and accompanying instructions are here.