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Jun 2009
02
June 02, 2009

Department of Labor Begins to Accept COBRA Subsidy Appeals

For those of you with former employees who have requested but have been denied the COBRA subsidy, you should know that the Department of Labor is now accepting appeals to review these denials. The Department of Labor has made available an application form that the former employee or other COBRA qualified beneficiary may use to appeal an employer’s determination that the individual is not eligible for the COBRA subsidy.

Under the American Recovery and Reinvestment Act of 2009 (ARRA), certain individuals who lose coverage under an employer’s group health plan because of an involuntary termination of employment that occurs between September 1, 2008, and December 31, 2009, are entitled to a 65 percent subsidy of their COBRA premiums for up to nine months. Individuals who lose coverage because of voluntary termination or because of other COBRA qualifying events are not entitled to the subsidy.

In some cases, there may be a difference of opinion as to whether a termination was "voluntary" or "involuntary" or whether the loss of coverage even resulted from a termination. Where this is a dispute, ARRA gives the former employee or other COBRA qualified beneficiary the right to seek an expedited review by the Department of Labor of whether the individual is eligible for the COBRA subsidy. The Department of Labor must make its determination within 15 business days, but has stated that it intends to give employers an opportunity to submit documents supporting the decision to deny subsidized coverage -- though the time period for this submission will likely be very short. Information about the review process and the application form are posted on the Department of Labor's Web site, www.dol.gov/COBRA.

If you have questions about the COBRA subsidy appeal process, whether a termination is considered voluntary under ARRA, or any other COBRA issues, please contact a member of Warner's Employee Benefits Practice Group.
 

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