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Mar 2009
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March 19, 2009

DOL Releases Model COBRA Subsidy Notice Forms

This morning the Department of Labor made available on its Web site model notice forms that employers may use to notify COBRA qualified beneficiaries of the new COBRA subsidy. The forms are available at: http://www.dol.gov/ebsa/COBRAmodelnotice.html.

Under the American Recovery and Reinvestment Act of 2009 (ARRA), COBRA premiums are subsidized at 65 percent for up to nine months for those who lose group health plan coverage because of an involuntary termination of employment that occurs between September 1, 2008, and December 31, 2009. Also, qualified beneficiaries who were offered COBRA and would be eligible for the subsidy but were not covered as of February 17, 2009, get a special "second chance" election period to elect COBRA at the subsidized rate. Employers may also give those who qualify for subsidized COBRA the opportunity to elect a less expensive coverage option.

The new law requires employers to notify qualified beneficiaries about their rights under the new COBRA subsidy law. The DOL has made available four different notification forms:

  1. A revised COBRA election notice form that includes information about the COBRA subsidy (for use with all qualified beneficiaries who have not yet received a COBRA election form).

     
  2. An abbreviated, supplemental COBRA subsidy notification form (for use with qualified beneficiaries currently enrolled in COBRA to provide notice of the subsidy).

     
  3. A notification about the “second chance” special election period (for use with qualified beneficiaries who would qualify for the COBRA subsidy but are not enrolled in COBRA coverage).

     
  4. An alternative notification form for use with those who receive continuation coverage under a state's mini-COBRA law, if applicable.

Although not entirely clear, employers should probably also use the notice described in number 3 above (or a variation of that notice) for all other qualified beneficiaries who received COBRA election notices since September 1, 2008, and are not currently covered under COBRA coverage (including those who lost group health plan coverage because of qualifying events other than involuntary termination of employment). For more information about the new COBRA subsidy, see our article from February 18, 2008.

If you have any questions about the COBRA subsidy, or need help customizing the notification forms, please contact any member of Warner's Employee Benefits Practice Group. For those who missed our previous seminars on the new COBRA subsidy requirements, we will be holding another session on Thursday, March 26, 2009. Please click here for more details.

 

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