Employee Benefits-DOL Requests Additional Comments Pertaining To Procedures For Review Of Denial Of COBRA Subsidy

In connection with its procedure for reviewing denials of the new COBRA subsidy, the Department of Labor (the “DOL”) is requesting additional comments on: (1) the application to be used to request review of the denial (the “Application”) and (2) the letter it will send to the plan administrator of the group health plan, with respect to which the COBRA subsidy has been denied, to request information pertaining to the denial (the “Letter”). The Application and the Letter are here. The request for additional comments may be found here.

As indicated in the request for comments, on February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (“ARRA”). ARRA provides a 65% subsidy on COBRA premiums paid by individuals (‘assistance eligible individuals”) who become eligible for COBRA coverage as a result of an involuntary termination of employment occurring during the period starting September 1, 2008 and ending December 31, 2009. ARRA also provides that if an assistance eligible individual is denied the subsidy by the group health plan which is required to provide him or her with the COBRA coverage, the individual may request that the DOL review this denial.

The Application is the form that an assistance eligible individual will use to request review of a subsidy denial by the DOL. All of the information requested on the Application must be completed, and the individual’s claim for the COBRA subsidy may be denied if sufficient information is not provided. In certain situations, the DOL will have to contact the plan administrator for additional information concerning the subsidy denial. The Letter will be used for this purpose, if the DOL is otherwise unable to contact the plan administrator. On May 20, 2009, the Office of Management and Budget (“OMB”) approved the Application and the Letter. The approval is scheduled to expire on November 30, 2009. Apparently motivated by the response it has received to the Application and the Letter, and in the context of the DOL’s request to OMB for an extension of its approval, the DOL is now requesting additional comments on the Application and the Letter. Comments must be in writing and are due by August 14, 2009.