Employee Benefits-Notices Must Be Provided For Extended COBRA Subsidy

In my blog yesterday (January 13), I discussed the new FAQs issued by the Department of Labor (the “DOL”) on the extension of the 9 month COBRA Subsidy originally made available by the American Recovery and Reinvestment Act of 2009 (“ARRA”), and extended to 15 months by The Department of Defense Appropriations Act, 2010 (“DODA”). In that discussion, I identified a “Transition Period” as being the period which begins immediately after the end of an individual’s 9 month period of entitlement to the Subsidy under ARRA prior to its amendment by DODA. Plan administrators are required to provide notices to COBRA beneficiaries about the Subsidy and the DODA extension. The FAQs indicate the following about these notices.

After ARRA was enacted, the Department of Labor (the “DOL”) created a “General Notice”, which a plan administrator of a plan providing COBRA coverage may use to satisfy its obligation to provide notice of COBRA rules and rights, and which includes information on the Subsidy provided by ARRA. A plan administrator must provide, as part of the COBRA election notice materials, a General Notice to all qualified beneficiaries, not just covered employees, who experience a qualifying event at any time from September 1, 2008 through February 28, 2010, regardless of the type of qualifying event. For qualifying events occurring after December 19, 2009, a General Notice-updated to reflect DODA- must be provided within the normal timeframe for providing a COBRA election notice.

If an individual has already been provided COBRA election notice materials which did not include a General Notice that was updated to reflect DODA, that individual must be provided a separate notice of the DODA changes to ARRA (the “Premium Assistance Extension Notice”). Listed below are the affected individuals and the associated timing requirements.

• Individuals who were “assistance eligible individuals” (see my January 13 blog) as of October 31, 2009 (and are not in a Transition Period), and individuals who experienced a termination of employment on or after October 31, 2009 and lost health coverage, must be provided the Premium Assistance Extension Notice by February 17, 2010; or • Individuals who are in a Transition Period must be provided the Premium Assistance Extension Notice within 60 days after the start of the Transition Period.

Further, if an individual experienced a qualifying event at some time on or after October 31, 2009 (but before December 19, 2009) and was provided a timely COBRA election notice which is, or is modeled after, the DOL’s original ARRA General Notice, then:
–if the qualifying event was something other than a termination of employment, nothing needs to be done.
–if the qualifying event was a termination of employment, the Premium Assistance Extension Notice must be provided by February 17, 2010.

If an individual is covered under more than one category of notice recipients, then that individual must be provided with the notice due at the earliest date. The DOL has issued a revised General Notice and a Premium Assistance Extension Notice. These notices may be found here.