ERISA Lawyer Blog

According to the Employee Benefits Security Administration's COBRA web page, the Unemployment Compensation Extension Act of 2010, signed by the President on July 22, 2010, did not extend the COBRA premium reduction. Thus, individuals whose employment is terminated (involuntarily or otherwise) after May 31, 2010 are not eligible for this reduction.

By way of background, the American Recovery and Reinvestment Act ("ARRA") provides a COBRA premium reduction (65% of the amount charged) for eligible individuals who are involuntarily terminated from employment through the end of May 2010. Due to a statutory sunset, the COBRA premium reduction under ARRA is not available for individuals who experience involuntary terminations after May 31, 2010. However, individuals who qualified on or before May 31, 2010 may continue to pay reduced premiums for up to 15 months, as long as they are not eligible for another group health plan or Medicare.

Employee Benefits-Government Issues Regulations On New Claims Review Procedures
The Affordable Care Act provides that group health care plans must provide an internal and external review procedure for benefit claims. This requirement builds on the claims procedure currently required by ERISA. It applies, in any plan year starting on or after September 23, 2010, to any group health care plan, other than a plan which is "gandfathered" (generally defined as being in existence on March 23, 2010 and not being changed since that date). A group health care plan to which the new claims procedure rules apply is referred to as a "covered health care plan". The Departments of Health and Human Services, Labor, and the Treasury have now jointly issued final, interim regulations which implement the new claims procedure rules. Here is a summary of what the new regulations say.

The new regulations give a participant in a covered health care plan the right to appeal any decision, including a benefit claim denial or rescission, made by the plan. More specifically, the new regulations give a participant:

--the right to appeal plan decisions through the plan's internal procedure; and

--for the first time, the right to appeal plan decisions to an outside, independent decision-maker.

These internal and external appeals procedures must be clearly defined, impartial, and designed to ensure that, when health care is needed and covered, the participant will have it.

Internal Appeals

A covered group health care plan must comply with all the requirements applicable to group health plans under the current ERISA claims procedure, as set forth in the Department of Labor's regulations (at 29 CFR 2560.503-1). The new regulations also contain the following six new requirements:

--the internal review procedure must apply to any adverse benefit determination, which includes any denial, reduction, termination or rescission of coverage, or any failure to pay a benefit;

--the plan must notify the participant of a benefit determination (whether adverse or not) with respect to a claim involving urgent care no later than 24 hours after receiving the claim (the DOL regs required 72 hours);

--the plan must provide the participant, free of charge and before any adverse benefit determination is issued, with the rationale for the upcoming determination, and with any new or additional evidence considered, relied upon, or generated by the plan in connection with the claim;

--to avoid conflicts of interest, the plan must ensure that all claims are handled in a manner designed to ensure the independence and impartiality of the decision-makers (e.g., the decision to hire a claims adjudicator or a medical reviewer cannot be made based upon the likelihood that the individual will support a denial of benefits);

--notice regarding benefit determinations must: (1) be written in a culturally and linguistically appropriate manner, (2) include information sufficient to identify the claim involved (such as date of service, the health care provider, the claim amount and any diagnosis codes), (3) describe the plan's internal/external claims procedure and how to initiate an appeal and (4) provide contact information for any government office established to assist the participant pursue internal and external claims; and

--if the plan fails to strictly adhere to all of the requirements of the internal claims procedure, the participant is deemed to have exhausted that procedure and may immediately initiate an external claim.

In addition, the plan is required to provide continued health care coverage to the participant pending the outcome of the internal appeal.

External Appeals

A covered health care plan must generally comply with either a State external review procedure or the Federal external review procedure. When the plan is insured, if there is a State external review procedure which applies to and is binding on the plan's insurer, and which includes, at a minimum, the consumer protections in the NAIC Uniform Model Act in place on July 23, 2010, then that insurer must comply with that State external review procedure, and the plan itself need not provide an external review. Any other covered health care plan, including a covered plan that is self-insured, must follow the Federal external review procedure (as discussed below, not yet established).

Under the new regulations, a State external review procedure will be treated as containing the requisite consumer protections if it:

--provides for the external review of an adverse benefit determination (including a final internal adverse benefit determination), which is based on medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit;

--requires the insurer to provide effective written notice to a plan participant of his or her rights in connection with an external review;

--if the State procedure requires exhaustion of an internal claims procedure, makes exhaustion unnecessary if the insurer has waived the exhaustion requirement, the participant has exhausted (or is considered to have exhausted) the internal claims procedure or the participant has applied for expedited external review;

--requires the insurer to pay the cost of an independent review organization (an "IRO") for conducting the external review (other than a minimal filing fee);

--does not impose a minimum dollar amount of a claim for it to be eligible for external review;

--gives the participant at least four months, after receiving a notice of an adverse benefit determination (including a final internal adverse benefit determination), to file a request for an external review;

--provides that an IRO will be assigned on a random basis, or utilizes
another method of assignment that assures independence and impartiality of the assignment procedure-the IRO cannot be selected by the insurer, plan or participant;

--provides for maintenance of a list of approved IROs-any IRO must be accredited by a nationally recognized private accrediting organization;

--provides that any approved IRO has no conflicts of interest that will influence its independence;

--allows the participant to submit to the IRO in writing additional information that the IRO must consider when conducting the external review, and requires that the participant is notified of this right;

--provides that the IRO's decision is binding on the insurer, plan and
participant, except to the extent that other remedies are available under State or Federal law;

--provides that the IRO must provide written notice to the insurer and the participant of its decision to uphold or reverse the adverse benefit determination, by no more than 45 days after it receives the request for external review;

--provides for an expedited external review in certain urgent circumstances and, in such cases, provides that the IRO will provide notice of its decision within 72 hours after it receives the request for review.

--requires that the external review procedures be described in the plan's summary plan description, policy, certificate, membership booklet, outline of coverage, or other evidence of coverage;

--requires that the IRO maintains written records of its decisions and makes them available to the State upon request; and

--follows procedures for external review of adverse benefit determinations involving experimental or investigational treatment, substantially similar to what is set forth in section 10 of the NAIC Uniform Model Act.

As a transitional rule, any existing State external review procedure will be treated as meeting the foregoing requirements, until the first plan year beginning after July 1, 2011. At that time, the Federal external review procedure will apply unless the State procedure is revised to meet these requirements.

The Departments of Health and Human Services, Labor, and the Treasury will establish a Federal external review procedure. The new regulations describe the standards which the Federal external review procedure must follow.

The Affordable Care Act - the health care reform legislation passed by Congress and signed into law by President Obama on March 23, 2010 -requires health care plans to cover recommended preventive services, without charging a deductible, copayment or co-insurance (that is, without "cost-sharing"). Any health care plan is covered by these requirements, unless the plan is "grandfathered" (that is the plan existed on March 23, 2010 and has not been changed so as to lose grandfather status). The Departments of Health and Human Services, Labor, and the Treasury have now issued regulations, which require covered private health care plans to offer recommended preventive services, and to eliminate cost-sharing for this coverage. The rules in the Affordable Care Act pertaining to preventive care, and the new regulations, apply in plan years beginning on and after September 23, 2010. The government has also issued a Fact Sheet on the new regulations. Here is what the Fact Sheet says on the preventive services that must be covered.

Plans covered by the preventive care rules in the Affordable Care Act and the new regulations must offer coverage of a comprehensive range of preventive services, which are recommended by physicians and other experts, without imposing any cost- sharing requirements. Specifically, these preventive services (including medications) include the following:

--Evidence-based preventive services: The U.S. Preventive Services Task Force, an independent panel of scientific experts, ranks preventive services based on the strength of the scientific evidence documenting their benefits. Preventive services with a "grade" of A or B, like breast and colon cancer screenings, screening for vitamin deficiencies during pregnancy, screenings for diabetes, high cholesterol and high blood pressure, and tobacco cessation counseling will be treated as preventive services that a covered plan must offer.

--Routine vaccines: A set of standard vaccines recommended by the Advisory Committee on Immunization Practices, ranging from routine childhood immunizations to periodic tetanus shots for adults, must be offered by a covered plan.

--Prevention for children: Preventive care for children, recommended under the Bright Futures guidelines developed by the Health Resources and Services Administration with the American Academy of Pediatrics, will be treated as preventive services that a covered plan must offer. This preventive care includes regular pediatrician visits, vision and hearing screening, developmental assessments, immunizations, and screening and counseling to address obesity and help children maintain a healthy weight.

--Prevention for women: Care provided to women under both the Task Force recommendations and new guidelines being developed by doctors, nurses, and scientists, which are expected to be issued by August 1, 2011, will be treated as preventive services for these purposes.

--Updates: The list of preventive services is regularly updated to reflect new scientific and medical advances. As new services are approved, covered health care plans will be required to cover them (with no cost-sharing) for plan years beginning one year later. A full list of the preventive services which must be offered by a covered plan is available at www.HealthCare.gov/center/regulations/prevention.html.

The recently enacted Affordable Care Act, and the interim final regulations just issued for this Act, have introduced a myriad new rules pertaining to health care. Among them are rules for patient protection, the elimination of lifetime limits on benefits and mandatory dependent coverage until age 26. Participants in an employer-sponsored health care plan (a "Plan") must be notified about these new rules, and the Employee Benefits Security Administration ("EBSA") has now issued model notices for this purpose. The model notices are here (patient protection), here (no limits) and here (coverage until age 26). The notice requirements are summarized below.

Patient Protection. A participant in a Plan now has the right to (1) choose a primary care provider or a pediatrician, when the Plan requires the participant to designate a primary care physician and (2) obtain obstetrical or gynecological care without prior authorization. Accordingly, the Plan must notify a participant about these rights. The notice must be provided whenever the Plan provides the participant with a summary plan description or other similar description of benefits under the Plan. Also, the notice must be furnished no later than the first day of the first plan year beginning on or after September 23,2010.

No Lifetime Limits. A Plan is required to give written notice that lifetime limits on benefits no longer apply, and that an individual to whom the limits had applied, if still covered, is once again eligible for benefits under the Plan. Further, if the individual is not enrolled in the Plan, or if an enrolled individual is eligible for, but not enrolled in, any benefit package under the Plan, then the Plan must also give this individual an opportunity to enroll that continues for at least 30 days (including written notice of the opportunity to enroll). The notice and enrollment opportunity must be provided beginning not later than the first day of the first plan year beginning on or after September 23,2010. For an individual who enrolls in the Plan under this opportunity, coverage must take effect not later than the first day of the first plan year beginning on or after September 23,2010.

Dependent Coverage Up To Age 26. The interim final regulations provide transitional relief for a child whose coverage under the Plan has ended, or who was denied coverage (or was not eligible for coverage) under the Plan because, under the Plan's terms, the availability of coverage ended before the attainment of age 26. The regulations require the Plan to give the child an opportunity to enroll that continues for at least 30 days (including written notice of the opportunity to enroll), regardless of whether the Plan has an open enrollment period and regardless of when any open enrollment period might otherwise occur. This enrollment opportunity (including the written notice) must be provided not later than the first day of the first plan year beginning on or after September 23,2010. The notice may be included with other enrollment materials that the Plan distributes, provided that the information on coverage until age 26 is prominent. Enrollment in the Plan must be effective as of the first day of the first plan year beginning on or after September 23,2010.

According to a new government Fact Sheet, the Departments of Health and Human Services ("HHS"), Labor, and Treasury have now issued regulations to implement a new Patient's Bill of Rights under the recently enacted Affordable Care Act. These rights will help children (and eventually all Americans) with pre-existing conditions gain coverage and keep it, protect all Americans' choice of doctors and end lifetime limits on the health care an individual may receive. These new protections apply to nearly all health insurance plans.

The Fact Sheet says that the new regulations for the Patient's Bill of Rights detail a set of protections that apply to health coverage starting on or after September 23, 2010, six months after the enactment of the Affordable Care Act. These protections are:

--No Pre-Existing Condition Exclusions for Children Under Age 19. The new regulations will prohibit health care and insurance plans from denying coverage to children based on a pre-existing condition. This ban includes both benefit limitations (e.g., an insurer or employer health plan refusing to pay for chemotherapy for a child with cancer because the child had the cancer before getting insurance) and outright coverage denials (e.g., when the insurer refuses to offer a policy to the family for the child because of the child's pre-existing medical condition). These protections will apply to all types of insurance except for individual policies that are "grandfathered," and will be extended to Americans of all ages starting in 2014.

--No Arbitrary Rescissions of Insurance Coverage. Under the new regulations, insurers and plans will be prohibited from rescinding coverage - for individuals or groups of people - except in cases involving fraud or an intentional misrepresentation of material facts. Insurers and plans seeking to rescind coverage must provide at least 30 days advance notice to give people time to appeal. There are no exceptions to this policy.

--No Lifetime Limits on Coverage. The new regulations prohibit the use of lifetime limits in all health plans and insurance policies issued or renewed on or after September 23, 2010.

--Restricted Annual Dollar Limits on Coverage. The new regulations will phase out the use of annual dollar limits over the next three years until 2014 when the Affordable Care Act bans them for most plans. Plans issued or renewed beginning September 23, 2010, will be allowed to set annual limits no lower than $750,000. This minimum limit will be raised to $1.25 million beginning September 23, 2011, and to $2 million beginning on September 23, 2012. These limits apply to all employer plans and all new individual market plans. For plans issued or renewed beginning January 1, 2014, all annual dollar limits on coverage of essential health benefits will be prohibited. Employers and insurers that want to delay complying with these rules will have to win permission from the Federal government by demonstrating that their current annual limits are necessary to prevent a significant loss of coverage or increase in premiums. Limited benefit insurance plans - which are often used by employers to provide benefits to part-time workers -- are examples of insurers that might seek this kind of delay. These restricted annual dollar limits apply to all insurance plans except for individual market plans that are grandfathered.

--Protecting Your Choice of Doctors. Under the new regulations, it is clear that health plan members are free to designate any available participating primary care provider as their provider. Parents may choose any available participating pediatrician to be their children's primary care provider. And, the new regulations prohibit insurers and employer plans from requiring a referral for obstetrical or gynecological (OB-GYN) care. The new rules apply to all individual market and group health insurance plans except those that are grandfathered.

--Removing Insurance Company Barriers to Emergency Department Services. Health plans and insurers will not be able to charge higher cost-sharing (copayments or coinsurance) for emergency services that are obtained out of a plan's network. The new regulations also set requirements on how health plans should reimburse out-of-network providers. These rules apply to all individual market and group health plans except those that are grandfathered.

In Notice 2010-48, the Internal Revenue Service (the "IRS") extends to July 30, 2010, the April 30, 2010 deadline for restating (and if applicable for submitting to the IRS a determination letter request for) a pre-approved defined contribution plan with a tie to a federal disaster area identified in the Notice. In the case of an employer, the restatement consists of adopting a new adoption agreement for the plan.

The disasters in question are the storms and flooding, which occurred in March through May of this year, in the states of New Jersey, Connecticut, Tennessee, Alabama, Mississippi, Massachusetts, Rhode Island and West VIrginia. A plan will have a tie to a federal disaster area if one of the following was located in the disaster area at the time of the disaster: the employer's principal place of business, or the office of the plan administrator, the primary recordkeeper, or any other advisor involved in the restatement of the plan.

The recent health care legislation has significantly overhauled the requirements pertaining to health care plans. However, some of the more important requirements do not apply to a "grandfathered" health care plan. Among these nonapplicable requirements are:

--no discrimination in favor of highly-paid employees;

--preventive care services must be offered with no deductibles or cost sharing;

--guaranteed access to OB-GYNs and pediatricians must be provided; and

--an appeals process must be available, which includes external review of denied claims.

Due to the exemption from the above requirements, it becomes important to identify a "grandfathered" plan. The Internal Revenue Service ("IRS"), Department of Labor ("DOL") and the Department of Health and Human Services ("HHS") has provided guidance for making this identification, in the form of a Fact Sheet, FAQs and proposed and interim regulations. Under this guidance, a group health care plan is a "grandfathered" plan with respect to any individual who is enrolled in the plan on March 23, 2010. A plan does not cease to be a "grandfathered" plan merely because one or more (or even all) of the individuals enrolled on March 23, 2010 cease to be covered by the plan. If family members of an individual, who is enrolled in the grandfathered plan as of March 23, 2010, enroll in the plan after that date, the plan is also a "grandfathered" plan with respect to those family members. A group health plan, which provided coverage on March 23, 2010, is a "grandfathered" plan with respect to new employees (whether newly hired or newly enrolled) and their families who enroll after that date. The plan must provide certain information to participants, and maintain records, pertaining to its grandfathered status (the regs have model language for this purpose).

According to the Fact Sheet, a "grandfathered" plan, as in effect on March 23, 2010, cannot make any of the following changes, or it will lose its status as such:

--it cannot significantly cut or reduce benefits (e.g., stop covering diabetes, cystic fibrosis or HIV/AIDS);

--it cannot raise co-insurance charges (e.g., if the plan imposes a fixed percentage of a charge for a medical service, such as 20% of a hospital bill, this percentage cannot be increased);

--it cannot significantly raise co-payment charges or deductibles;

--it cannot significantly lower employer contributions (that is, it cannot decrease the percent of premiums the employer pays by more than 5 percentage points);

--it cannot add or tighten an annual limit on what the insurer pays;

--it cannot change insurance companies; and

--it cannot be involved in a business restructuring intended to avoid the new health care requirements.

In Rev. Proc. 2010-22, the IRS has announced the deduction limits and high deductible health plan thresholds for health savings accounts ("HSAs") for 2011. And guess what? They are the same as for 2010 (since there wasn't enough of a change in the Consumer Price Index to make any adjustment).

As such, for calendar year 2011, the annual limit on deductions for contributions to an HSA under section 223(b)(2)(A) of the Internal Revenue Code (the "Code")) is:

--$3,050 for an individual with self-only coverage under a high deductible health plan; and

--$6,150 for an individual with family coverage under a high deductible health plan.

Also for calendar year 2011, a "high deductible health plan" is defined, under section 223(c)(2)(A) of the Code, as a health plan with an annual deductible that is not less than $1,200 for self-only coverage or $2,400 for family coverage, and for which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $5,950 for self-only coverage or $11,900 for family coverage.

Internal Revenue Code Section 401(a)(35) imposes diversification requirements for qualified defined contribution plans which hold publicly traded employer stock. Under these requirements, a participant with at least 3 years of service (or a beneficiary of a deceased participant) must be allowed to direct the plan to divest the employer stock which is held in his or her plan account, and which was acquired with elective deferrals or employee contributions, and to reinvest an equivalent amount in other investment options. For this purpose, the plan must offer at least 3 investment options, other than employer stock, each of which is diversified and has materially different risk and return characteristics. A participant (or beneficiary) must be permitted to divest the employer stock at reasonable, periodic times occurring at least quarterly, and the plan may not impose restrictions or conditions on the divestment of employer stock that is not imposed on other plan assets.

The IRS has now issued final regulations on these Section 401(a)(35) diversification requirements. Feel free to contact me with any questions you have.

Section 45R of the Internal Revenue Code, which was added by the recently enacted Patient Protection and Affordable Care Act, offers a tax credit to certain small employers that provide health insurance coverage to their employees. It is effective for taxable years beginning in 2010. Both taxable and tax-exempt employers and employers may be eligible for the new tax credit.

The Internal Revenue Service ("IRS") has issued Notice 2010-44 to provide guidance on the new tax credit. The Notice provides information, including helpful examples, on employer eligibility to take the tax credit, how to calculate and claim the tax credit, and transitional relief for qualifying for the tax credit in 2010.

The Department of the Treasury, Department of Labor and Department of Health and Human Services have jointly issued Interim Regulations on the requirement in the recently enacted health care legislation that a health care plan, which offers dependent coverage, must make the coverage available for children until they reach age 26. This requirement becomes effective at the start of the first plan year beginning after September 23, 2010. Here are some of the points made in the Interim Regulations:

--A plan may not condition the eligibility of an employee's child-of any age- for dependent health care coverage on any factor, such as marital status, student status, residency, and financial support, other than the child being under age 26.

--A plan cannot charge a higher premium for an adult child than for a younger child.

--The benefits available, and the terms and conditions of health care coverage, under the plan cannot vary based on the age of a child, so long as the child is under age 26.

--A plan cannot exclude a child under age 26 from health care coverage, even if that child previously lost coverage under that plan or had never been enrolled in the plan. A child who earlier lost or was denied health care coverage must now be given an opportunity to enroll in the plan (including being provided with a written explanation of this opportunity ), over a 30-day period. The enrollment period must start (and the written explanation must be provided) by no later than the start of the first plan year beginning after September 23, 2010.

--The child of an employee's child need not receive dependent coverage.

The recent health care reform legislation includes a new tax credit for eligible small employers that make nonelective contributions towards their employees' health insurance premiums. Prior to 2014, the amount of the credit is based on a percentage of the lesser of: (1) the amount of nonelective health insurance contributions paid by the employer on behalf of its employees and (2) the amount of nonelective health insurance contributions the employer would have paid, if its employees had been enrolled in a plan with a premium equal to the average premium for the small group insurance market in the employer's State (or area within the State) in which the health insurance coverage is offered.

To establish the amount in prong (2), IRS Revenue Ruling 2010-13 contains a chart which sets forth the average premium for the small group insurance market in each State for 2010. The Revenue Ruling also notes that there may be areas in some States with meaningfully higher premium rates. Consequently, for 2010, additional average premium rates may be provided by the Department of Health and Human Services for the small group insurance market in certain areas within the States. In no case will any such additional rate be lower than the rate for the State indicated in the Revenue Ruling.

The recent health care reform legislation, found in the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, signed into law by the President on March 23 and 30, 2010, respectively (for convenience, the "Act"), provides a tax exclusion for health care coverage provided to an employee's child who is under age 27. In Notice 2010-38, the Internal Revenue Service (the "IRS") provides guidance on this new tax exclusion. Here is what the Notice says:

Section 105(b) of the Internal Revenue Code (the "Code") generally excludes from an employee's gross income employer-provided reimbursements for medical care expenses of the employee, the employee's spouse or the employee's dependents. The Act amends section 105(b), effective as of March 30, 2010, so that this exclusion from gross income is extended to employer-provided reimbursements for the medical care expenses of the employee's child who has not attained age 27 as of the end of employee's taxable year in which the reimbursement is made. The exclusion is available without regard to whether the child is a "dependent", within the meaning of section 152 of the Code. For this purpose, "child" is defined under section 152(f)(1).

Section 106 of the Code excludes the cost of coverage under an employer-provided accident or health plan from an employee's gross income. Although the Act does not amend section 106, the IRS intends to amend the regulations under section 106, retroactively to March 30, 2010, to provide that the cost of coverage for an employee's child under age 27 is excluded from gross income.

Section 125 of the Code allows employees to elect between cash and certain qualified benefits, including accident or health plan coverage (described in section 106) and health flexible spending arrangements (health FSAs) (described in section 105(b)). A "qualified benefit" is generally any benefit which (with the application of section 125) is not includible in the employee's gross income. Accordingly, on and after March 30, 2010, a benefit will not fail to be a "qualified benefit" under a cafeteria plan (including a health FSA), merely because it provides coverage or reimbursements that are excludible under sections 106 and 105(b) for a child who has not attained age 27 as of the end of the employee's taxable year.

A cafeteria plan may permit an employee to revoke an election during a period of coverage, and to make a new election, only in limited circumstances, such as a change in status event. The IRS intends to amend the cafeteria plan regulations, effective retroactively to March 30, 2010, to include change in status events affecting children under age 27, including becoming newly eligible for coverage or eligible
for coverage beyond the date on which the child otherwise would have lost
coverage. The Notice contains a transitional rule for amending cafeteria plans to reflect the new rules.

In general, a health reimbursement arrangement (an "HRA") is an arrangement which is paid for solely by an employer (and not through a section 125 cafeteria plan), and which reimburses an employee for medical care expenses up to a maximum dollar amount for a coverage period. The same rules that apply to an employee's child under age 27 for purposes of sections 106 and 105(b), as described above, apply to an HRA.

Coverage and reimbursements under an employer-provided accident and health plan for employees and their dependents are generally excluded from wages for Federal Insurance Contributions Act ("FICA") and Federal Unemployment Tax Act ("FUTA"). For this purpose, any child of the employee (as defined under section 152(f)(1)) is a dependent. Thus, coverage and reimbursements under a plan for an employee's child under age 27 are not wages for FICA or FUTA purposes. Such coverage and reimbursements are also exempt from income tax withholding.

The Notice also provides guidance on payments made by VEBAs, 401(h) accounts in pension plans and self-employed individuals.

The recently passed Continuing Extension Act of 2010 has extended the 15-month, 65% COBRA subsidy, originally provided by the American Recovery and Reinvestment Act of 2009. Under this extension, an individual may qualify for the subsidy if he or she experiences a COBRA qualifying event, which is the involuntary termination of a covered employee's employment, at any time from September 1, 2008 through May 31, 2010. For this purpose, an involuntary termination of employment which occurs on or after March 2, 2010 but by May 31, 2010, and which follows a qualifying event that was a reduction of hours occurring at any time from September 1, 2008 through May 31, 2010, is also a qualifying event for purposes of an individual being eligible for the COBRA subsidy.

To help with the administration of the COBRA subsidy, the Employee Benefits Security Administration (the "EBSA") COBRA page now has available updated Model Notices, Application for Expedited Review of Denial of COBRA Premium Reduction, Fact Sheet, and Frequently Asked Questions (FAQs) that reflect the provisions of the Continuing Extension Act of 2010. The EBSA's COBRA page is here.

Here is what the Internal Revenue Service ("IRS") had to say (in the Winter 2010 edition of Retirement News for Employers) on this deadline for employers using pre-approved defined contribution plans:

The IRS wants to remind employers entitled to use the pre-approved plan six-year cycle
of an upcoming April 30, 2010, deadline to adopt the final approved version of the defined
contribution pre-approved plan and submit applications for determination letters, if applicable. Employers entitled to use the six-year remedial amendment cycle described in Revenue Procedure 2007-44 must generally adopt either a master and prototype (M&P) or volume submitter (VS) defined contribution plan approved by the IRS for EGTRRA and other plan qualification requirements on the 2004 Cumulative List by April 30, 2010, for the plan's restatement to be eligible for retroactive correction and reliance.

April 30, 2010, is also the filing deadline for employers who have adopted an M&P or VS defined contribution plan and need to file a determination letter request for reliance (in
other words, where the employer makes certain changes to the document) or otherwise
wish to file a request for a determination letter.

The IRS continues by providing some tips on filing for a determination letter when the employer has made changes to a pre-approved document for an M&P plan or a VS plan. This edition of Retirement News for Employers is here.