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Jan 2010
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January 15, 2010

DOL Releases New Notices for COBRA Subsidy Extension

As we recently reported, Congress has extended rights under the COBRA subsidy so that individuals whose employment is involuntarily terminated through the end of February 2010 can qualify for the subsidy. The subsidy has been extended from nine to 15 months. Additionally, those who let their COBRA coverage lapse after their original nine-month subsidy period expired can elect retroactive subsidized coverage. If they paid the full premium after the nine-month subsidy period ended, they can either be reimbursed for the amount over the sub! sidized premium or have the excess amount applied to future COBRA premiums.

As part of the new law, employers have certain notification obligations:

  • Those who were covered by COBRA and eligible for the subsidized premiums on or after October 31, 2009 must receive notice of the changes by February 17, 2010.
  • Those who became eligible for COBRA coverage because their employment was involuntarily terminated between October 31 and December 19, 2009 must also receive notice of the changes by February 17, 2010. Anyone who is eligible for COBRA because of an involuntary termination of employment occurring after December 19, 2009 must receive notice of the changes before the end of the normal 44-day deadline for providing an election notice.
  • Those for whom the original nine-month subsidy expired must be notified of their rights to continue subsidized coverage within 60 days of the date their nine-month subsidy period expired. For those whose subsidy expired at the end of November (requiring full premium payments for December), notification is required by January 29, 2010 (60 days after November 30, 2009).

The Department of Labor has just released updated model notice forms that now include language describing the extended COBRA subsidy rights. The forms include a Premium Assistance Extension Notice, which you can use with individuals who have already received a general election notice. The forms also include an updated General Notice, which you can start using with COBRA-eligible individuals who experience a qualifiying event through the end of February 2010 and have yet to receive a general election notice.

If you need assistance with these forms, or in tailoring your own forms to meet the notification requirements, please contact Norbert F. Kugele (nkugele@wnj.com, or by phone at 616.752.2186), Lisa Zimmer (lzimmer@wnj.com, or by phone at 248.784.5191), or any other member of Warner's Employee Benefits Practice Group.
 

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